The Union Budget has consistently served as a critical catalyst for Indian equity markets, historically triggering significant short-term price movements and shaping sectoral trends in alignment with the government's evolving policy priorities. As anticipation builds for the Union Budget for the fiscal year 2026, market participants are closely monitoring expectations for increased allocations toward defence, a sustained emphasis on capital expenditure, and strategic measures designed to uphold macroeconomic stability. This environment has led traders and investors to brace for elevated volatility, with positioning intensifying in the lead-up to key announcements.
Budget Day Trading: A Rare Sunday Session
The Union Budget for 2025 is scheduled to be presented in Parliament by Finance Minister Nirmala Sitharaman on February 1 at 11 am. Notably, this presentation falls on a Sunday, yet Indian equity markets will remain open for trading, marking a rare Budget Day session. Historical patterns indicate that such sessions often experience sharp intraday swings as investors rapidly react to policy signals that can swiftly alter market sentiment and sectoral outlooks.
Expert Caution on Volatility and Risk Factors
Market experts have issued warnings regarding potential volatility surrounding the Budget presentation. Sharma of JM Financial Services highlighted that several domestic and global risk factors could amplify volatility and impact investor sentiment in the near term. He advised investors to maintain caution and avoid aggressive positioning until a clearer policy direction emerges post-announcements.
He elaborated, "Budget day volatility remains high, with potential sell-offs if stimulus measures fall short or fiscal targets slip, which could raise bond yields and tighten liquidity. Additionally, geopolitical tensions, currency fluctuations, and global trade disruptions pose significant external threats."
Brokerage Stock Picks: Navigating Budget-Led Opportunities
In response to the anticipated market dynamics, leading brokerage houses have curated extensive lists of stock ideas aimed at navigating expected volatility and capitalizing on potential Budget-led sectoral tailwinds. These recommendations collectively span over 100 stocks across key themes such as defence, infrastructure, banking, energy, manufacturing, and consumption, reflecting areas where policy support is widely anticipated.
Comprehensive Stock Recommendations from Top Firms
Motilal Oswal highlights a diverse portfolio including L&T, ABB, Siemens, Hitachi, Siemens Energy, KEC, Bharat Electronics, Bharat Dynamics, HAL, Ultratech, JK Cement, Polycab, KEI, Crompton, Titan, PN Gadgil, Niva Bupa, AMCs, RTAs, most HFCs, MFIs, infrastructure players, IGL, Mahanagar Gas, Gujarat Gas, Petronet LNG, GAIL, Waaree, Premier, NTPC, Tata Power, Acme, NTPC Green, Brigade, Prestige, Sobha, Lodha, and Godrej Properties.
Axis Securities offers a dual approach with Positive Budget Play (Coverage) featuring Ultratech Cement, Maruti Suzuki, Bharti Airtel, NALCO, Prestige Estate, Chalet Hotels, Max Healthcare, and Credit Access Grameen. Their Non-Coverage list includes GMDC, BEL & MTAR, Amar Raja Energy, CESE, M&M Finance, and Jain Resource Recycling.
Anand Rathi presents top picks across all sectors such as UPL, Sharda CropChem, Max Healthcare, KIMS, Indraprastha Medical, Ashok Leyland, ZF Commercial Vehicles, JK Cement, Birla Corp, PG Electroplast, Polycab, Waaree Energies, L&T Finance, Poonawalla, Indian Hotels, InterGlobe Aviation, Fine Organic Industries, Astral, Supreme Industries, Cera, Kajaria, Greenply, Greenpanel, Mayur Uniquoters, Solar Industries, Hindustan Aeronautics, TD Power, Jubilant Ingrevia, V-Mart, GCPL, Mrs Bector Food, PNC Infratech, and Aptus Housing.
Prabhudas Lilladher recommends Adani Port & SEZ, Britannia Industries, HDFC Life Insurance Company, Hindustan Aeronautics, ICICI Bank, Larsen & Toubro, Mahindra & Mahindra, Shriram Finance, State Bank of India, Tata Steel, Titan Company, Aster DM Healthcare, Fine Organic Industries, KEI Industries, LG Electronics India, and Max Healthcare Institute.
Choice Broking focuses on Ultratech Cement, Radico Khaitan, Allied Blenders, M&M, TVS Motor, Lumax Auto, Shanti Gold, Bharat Electronics, Bharat Dynamics, Data Patterns, Artemis Medicare, Yatharth Hospital, Sobha, Smartworks Coworking, Sun Pharma, Divis Labs, TCS, and Meesho.
Disclaimer: The views and recommendations provided above are those of individual analysts or broking companies and not of Mint. Investors are advised to consult with certified experts before making any investment decisions.
