The stock market reacts to the Union Budget in different ways, depending on the sectors and policies announced. Generally, investors look for sectors that benefit from the government’s initiatives. Here are five types of stocks that often attract attention on Budget day:
1 Automobile Stocks:
If the budget includes incentives for electric vehicles or a boost to infrastructure that supports mobility, stocks of companies like Maruti Suzuki or Tata Motors could get a boost. Investors may benefit.
2 Renewable Energy Stocks:
If there is a move towards sustainable energy and green initiatives, stocks like NTPC or Adani Green could see a rise due to government support for clean energy.
3 Consumer Goods (FMCG):
If there are announcements related to an increase in disposable income for the middle class (for example, through tax cuts), then stocks of FMCG companies like HUL, ITC or Dabur tend to do well.
4 Infrastructure Stocks:
The government generally emphasizes on infrastructure development, hence stocks of companies related to construction, roads and building materials (like L&T, UltraTech Cement) may see a positive surge.
5 Banking and Financial Stocks:
If the budget includes measures to boost the financial sector or tackle the problem of bad loans, stocks of banks like HDFC Bank, SBI or financial institutions like Bajaj Finance may benefit.
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