NEW DELHI: Indian Markets are expected to slip post the Union
Budget 2013 on February 28, according to global investment bank Morgan Stanley.
Historically, in the past 20 years, the MSCI India has outperformed the MSCI EM on eight occasions (1997, 1999, 2001, 2004, 2005, 2006, 2010 & 2011) in the month after the Budget.
On average, India markets have fallen 2.3 per cent in the month after the Budget with the first 15 days accounting for most of it, underperforming emerging markets by 1.5 per cent.
According to Morgan Stanley's observation, if the market is up in the month before the Budget, it has an 80 per cent prospect of falling post the event, higher than the overall probability of 60 per cent.
"A market that is already down before the Budget still holds an even chance of slipping further in the month after," said the report.
Historically, March has been the worst month of the calendar year, partly because of the Budget itself. The market still seems skeptical ahead of the key event.
After registering a return of 26 per cent in the year 2012, Indian markets corrected significantly so far in the year 2013 from its highs. For the month of January, the BSE Sensex rose 1.96 per cent.
While for the month of February, Indian markets have erased most of their gains registered in January and were down over 2 per cent.
Morgan Stanley advises investors to stay long in equities because the path of fiscal consolidation will likely prove positive for share prices going forward.
Source : economictimes.indiatimes.com