Union budget 2012 and its impact on share market
Union budget 2012 has been announced and most you might have already gone through the list of items which are going to be expensive and cheap. But its real impact will be seen as we will move ahead in the next financial year. Many experts are calling it a “Lost Opportunity”. Service tax hike will further add the inflationary pressure with almost everything becoming more expensive.
Many manufacturers across various sectors like auto, consumer electronics, soft drinks and milks have already said that they will be increasing prices soon. Excise duty hike is going to severely affect the margin and if prices are increased then it may impact the demand also. Stock markets have not done well for almost entire year now and since budget announcement, they have been falling consistently.
Analysts are also expecting petroleum products to go up in next few months. The entire scenario doesn’t look for the Indian economy. In last few weeks, there were little positive news in few sectors like auto but with these changes, things may again get stuck. If sales figures for first quarter of next year are not impressive then that may have negative impact on entire year.
Foreign investors have not been very kind to Indian stock market in last one year and if there are no extraordinary positive signs, then it is going to be extra difficult for Indian stock markets to attract them. Without active participation of Foreign Direct investors, stock markets cannot rise beyond a certain point even if everything works in its favor.
It will be interesting to see how variable factors like crude oil prices & rupee strength are going to be in next year. These factors can make or break a lot of things under current circumstances. It is advisable to only invest in trusted companies with good track record and healthy balance sheet along with long term vision. Trading in small and mid cap could be dangerous if done without calculation at that point of time.
There are still few things which are important but not getting appropriate attention in budget and policies at large. One of them is Policies to support Startups. Startups can change the face of any country. India has got huge potential but due to lack of basic support for startups, many startups fail to excel. If there could be a special policies dealing with just startups, it could really make a huge difference to Indian economy at large and share markets in particular.
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