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Stock market may see pre-Budget rally this week on reform means

Sunday, 29 June 2014 - 8:22pm IST | Place: Mumbai | Agency: PTI

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Stock market will most likely see bullish trends this week in the run up to Union Budget as investors pin hopes on strong reform measures to rev up the economy, say experts.

The key BSE and Nifty indices are expected to gain further this week adding to the gains made last week, they said.

According to experts, the BSE's benchmark Sensex will move by 400-500 points next week and the Nifty scaling by 150 points.

Expectations from the Union Budget, which would be presented by Finance Minister Arun Jaitley on July 10, are increasing and there are chances that a pre-Budget rally could begin from this week.

"Next week would see pre-budget rally on the back of expectations regarding financial sector reforms and some policy announcements on raising FDI ceiling in defence and railways in the upcoming budget," CNI Research Head Kishor Ostwal said.

Another analyst Alex Mathew, Research Head at Geojit BNP Paribas said: "Traders are expecting a strong reform-oriented Budget but the recent decisions by the Narendra Modi-led government may spoil the mood on Dalal Street."

In a major decision, the Railways Ministry last week announced an across-the-board hike of 14.2 percent in passenger fares and 6.5 percent in freight rates.

The decision met some stiff resistance and finally the government partially rolled back some of the hike by exempting second-class suburban travel up to 80 km and reducing the severity of hike for monthly season ticket-holders.

In another move, the government has deferred hike in natural gas price for three months.

The Sensex and Nifty ended on positive note closing at 25,099.92 and 7,508.80 on Friday, respectively. 

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