Budget Lacks Support To The Stock Market

by Arpita Wadhawan
Small & Midgap Stocks

With the budget released on July 5, for the year 2019, the Indian stock markets have experienced a downward trend, by losing all the gains made earlier in the week. This downtrend caused by the release of the budget for the year 2019, has closed the stock markets marginally for the week ended 5th July.

Even though the market has with it all the necessary factors to keep the gains moving in the momentum, the budget has completely failed in aligning with these advantageous factors and thereby failed in bringing in inclusive growth. Even on the other hand, the broader market also has faced a burden owing to the downfall in the small and midcap indices.

Throughout this period, almost 23 stocks in the S&P BSE Smallcap index have experienced a downfall of about 10 to 30 percent; which include Atlanta, Eros International, KRBL, Nitin Fire, McLeod Russel, Cox & Kings, MT Educare, etc. among others.

Now that we have understood the downfall in the market caused by the announcement of the budget for the year 2019, now we shall look into the factors that have contributed to this downfall.

Although the reforms announced by the finance minister will help to boost the economy in the future, there is negligence by the ruling government in offering a strong stimulus that will help the economy in realizing the true potential of the development.

Such an impact of the budget announced by the ruling government on the stock market represents a downfall in the short term owing to the lack of supportive factors that provide stimulus to the economy. However, many market experts believe the fact that the reforms announced by the government in the budget will provide the stock market with necessary factors that provide a positive run in the long term.

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