Excess budget, RBI policy, third quarter earnings to decide the course of the market this week: analysts

MUMBAI: Excess budget is likely to dominate the trading pattern in the stock market this week, while participants will also closely observe other developments such as RBI policy, the publication of key macro data and quarterly earnings, according to analysts .

Giving a thumb to the Budget, the sensex market benchmark registered its biggest drop in a single day in more than a decade on Saturday after the Budget was presented.

Analysts said investors were disappointed as the Budget did not meet market expectations for measures to boost growth and fiscal discipline.

The lack of important measures to boost growth in itself is negative for the equity market. The new income tax regime would also be negative for tax-exempt equity savings schemes, said Sujan Hajra, chief economist and executive director of Anand Rathi Shares &.

The finance minister on Saturday cut the income tax for people, abolished the tax on dividends for companies and announced some measures for the agriculture and infrastructure sectors.

The reformulation of dividend tax rules also seems to be in the negative balance for most national stock investors. Overall, the Budget appears to be negative for the stock market, Hajra said.

In addition, changes in the slab of income tax also fueled fear of declining entries in the investment pathways to save taxes.

The changes in the income tax announced have come with the possibility of giving up the exemptions that disappointed the markets, with the most affected insurance sector, said Vinod Nair, head of research at Geojit Financial Services Ltd.

He also said that the flexibility shown in the fiscal deficit for fiscal year 20 is positive, but extending it to fiscal year 21 would have provided more confidence to the market.

Since the event is over, the focus will now focus on continuous third quarter announcements and how global events will develop in the short term, Nair added.

The Reserve Bank will announce on Thursday its first bi-monthly monetary policy after the Budget.

On the front of corporate earnings, Bharti Airtel, Lupine and Mahindra&Mahindra are among the main companies scheduled to report their results from October to December this week.

Related concerns can also dictate feelings in the global and domestic market.

The day of the budget, the BSE sensex finished 987.96 points, or 2.43 percent lower, at 39,735.53.

During the last week, 1,877.66 points plummeted to close below the 40,000 key mark.

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