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Budget 2019 is near; stock market expected to be volatile, here’s when you should buy

Pragya Srivastava
The pressure, built up since last August, with Nifty 50 struggling to sustain above the 11,000-mark, is expected to expand further due to the budget season

Budget 2019: With the Budget day nearing close amid speculations of populist announcements, the stock market is “expected to remain highly volatile” and will keep a close eye on decisions taken by the Narendra Modi government in their final few months before the country goes to polls.

The pressure, built up since last August, with Nifty 50 struggling to sustain above the 11,000-mark, is expected to expand further due to the budget season and the upcoming Lok Sabha election.

“Markets are expected to remain highly volatile in the near term on account of the Union Budget 2019,” Sahaj Agrawal of Kotak Securities Ltd said in a note, adding that the broader range for Nifty 50 is expected to be around 10,400-11,000.

Other analysts are also projecting volatility in coming days and suspect further correction towards the end of the year. UBS Securities estimates that Nifty 50 could go down to 10,000-level by the end of the year.

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In the last one month, Nifty 50 has fallen 211 points. Since August 31, when it had hit a lifetime high of 11,680.5, the index has gone down nearly 1,030 points.

“Our base case Nifty target for end-2019 is 10,000, implying a downside of 7%, while our upside/downside scenarios also suggest unattractive risk-reward. While GDP growth may recover a bit, political and policy uncertainty keeps us cautious,” Gautam Chhaochharia, Analyst, UBS Securities India said in a recent note.

However, given the looming uncertainty ahead, Kotak Securities said that buying aggression would be advisable around 10,400 levels. “Select banking stocks and IT trades with a positive bias while Metal and Media trade weak,” it added.