Budget fires up the market sentiment

Markets have rallied smartly after the budget. Sentiment has decisively turned positive. Our strategy of remaining invested before the budget is proving to be the right one. Investors who have bought in last week should stay invested and churn their portfolios towards sectors and stocks which benefit from the budget and economic environment going forward. Investors sitting on cash may like to wait for declines to enter the market. Though the markets are likely to remain bullish but the Sensex and Nifty are likely to remain range bound as global sovereign risks are likely to generate significant head winds going forward. Stock and sector specific approach will be the ideal way to make money. Sectors which tend to gain from the budget are automobiles, banking, cement, infrastructure and alternate energy. Metals will continue doing well on the back of robust demand from China and India. Capitalization of PSU Banks, increase in interest subvention and higher credit support to farmers all augur well for banks, in particular the public sector banks.  On declines we recommend buying in stocks like ACC, Ultratech, JP Associates, TISCO, Sterlite, Sesa Goa, ICICI, Axis Bank, PNB, SBI, BHEL, Crompton Greaves, Tata Motors, Bajaj Auto, Bharat Forge and RIL.