The Indian stock market is witnessing strong buying interest ahead of the Union Budget 2025
The Indian stock market witnessed a strong pre-budget rally as investors showed confidence in key sectors ahead of the Union Budget 2025. With Sensex and Nifty gaining momentum, several stocks across engineering, infrastructure, real estate, and financial services posted significant gains. Market participants expect fiscal incentives, infrastructure spending, and policy reforms to drive further growth in various sectors.
Jewelry and Engineering Sectors Shine
The diamond and jewelry sector led the rally, with Kalyan Jewellers surging 10.58% to ₹487.25. Strong festive demand, robust earnings growth, and expectations of favorable taxation policies in the upcoming budget contributed to the stock’s positive momentum. Investors anticipate government initiatives that could boost domestic gold demand, potentially benefiting jewelry companies.
The engineering sector also performed well, with Jupiter Wagons jumping 9.77% to ₹390.55. Rail-related infrastructure developments and an anticipated increase in capital expenditure have fueled optimism around engineering firms, particularly those engaged in railway projects.
Chemical and Real Estate Stocks Gain Strength
Navin Fluorine, a leading player in the chemical industry, posted a 7.33% increase, reaching ₹4,194.55. Demand for specialty chemicals remains strong, with analysts expecting incentives for domestic production in the budget. The push for Make in India and PLI (Production Linked Incentive) schemes could further support chemical companies.
The real estate sector continued its upward momentum, with Anant Raj rising 7.21% to ₹601.90. The government's focus on affordable housing, infrastructure development, and real estate investment incentives has fueled optimism. Anticipated tax deductions on home loans and increased allocation to the housing sector are expected to boost investor sentiment further.
Infrastructure and Heavy Engineering Stocks in Focus
Infrastructure stocks saw a strong rally, with BEML climbing 7.17% to ₹3,794.50. Increased allocations toward defense manufacturing, railway expansion, and urban infrastructure have strengthened the outlook for infrastructure firms. Ircon International also gained 7.06%, closing at ₹217.02, as the focus on railway modernization remains a key driver.
Rail Vikas Nigam surged 6.39% to ₹464.80, reflecting growing investor confidence in railway and metro projects. The expected budgetary push toward public transportation and railway connectivity has contributed to positive sentiment around rail-related stocks.
Garden Reach Shipbuilders, a key player in the defense and shipbuilding sector, jumped 6.06% to ₹1,612.00. With India's focus on naval expansion and defense modernization, shipbuilders continue to attract institutional interest.
Auto Ancillary and Oil Exploration Stocks Rally
Auto ancillary companies witnessed strong buying, with Minda Corporation gaining 6.16%, closing at ₹565.65. The push toward electric vehicles (EVs), localization of component manufacturing, and rising automotive demand have strengthened the outlook for the sector. Investors expect reduced import duties on auto components and enhanced incentives for EV battery production, further driving growth.
In the oil and gas sector, GAIL rose 5.7% to ₹176.63 amid expectations of natural gas pricing reforms and increased investment in domestic gas production. The company stands to benefit from rising LNG demand, expansion of city gas distribution networks, and pipeline infrastructure development.
Mahanagar Gas also posted 5.22% gains, reaching ₹1,371.50, driven by expectations of favorable policy support for city gas distribution expansion.
BHEL, IRB Infra, and Nestlé Among Top Gainers
BHEL, a key infrastructure and power equipment manufacturer, climbed 5.64% to ₹207.45. The government's renewable energy push, focus on power generation, and increased allocations to infrastructure projects have boosted investor sentiment.
IRB Infrastructure, a major player in the transport infrastructure sector, gained 5.54%, trading at ₹56.62. Market optimism around highway expansion, expressway projects, and road development allocations in the budget has led to strong buying in infrastructure stocks.
Nestlé India, from the food processing sector, rose 5.48% to ₹2,338.95 amid expectations of increased consumer demand, rural spending, and tax benefits for FMCG companies.
Finance and Investment Stocks Attract Interest
The finance sector also saw gains, with Home First Finance climbing 5.61% to ₹998.15. The anticipated tax relief on home loans and higher allocations to affordable housing have boosted investor interest in housing finance stocks.
Aditya Birla Sun Life AMC (ABSL AMC) jumped 5.39% to ₹690.00, as the market anticipates favorable tax treatment for mutual fund investments and improved regulations supporting the asset management industry.
Telecom and Tea & Coffee Stocks on the Rise
RailTel, a key telecom infrastructure company, rose 5.3% to ₹404.40. The push for 5G infrastructure expansion, increased fiber network investments, and digital transformation initiatives have contributed to positive sentiment around telecom and broadband infrastructure firms.
In the plantation and beverage sector, Tata Consumer Products gained 5.42%, trading at ₹1,019.10. The company's strong portfolio in tea, coffee, and packaged foods, along with expanding e-commerce sales, continues to drive growth.
Market Outlook and Pre-Budget Expectations
The stock market's pre-budget rally reflects investor optimism about pro-growth policies, infrastructure expansion, tax incentives, and fiscal stimulus measures. Sectors such as engineering, infrastructure, real estate, auto, and consumer goods are likely to benefit from key policy announcements.
The government's continued focus on capital expenditure, manufacturing incentives, and digital transformation will be crucial in determining the market's trajectory post-budget. The divestment of PSU assets, potential changes in corporate taxation, and regulatory clarity for sectors like finance and EVs will also impact sentiment.
Market analysts expect volatility to remain high in the coming sessions as investors adjust their portfolios based on budget announcements and global market trends. The focus remains on government spending plans, fiscal deficit targets, and sector-specific reforms, which will shape investor confidence in the short and medium term.
The Indian stock market is witnessing strong buying interest ahead of the Union Budget 2025, with key sectors such as infrastructure, engineering, real estate, finance, auto, and oil & gas leading the rally. Positive sentiment surrounding expected budgetary measures, fiscal incentives, and government reforms has fueled gains across multiple stocks.
With increased capital inflows and institutional participation, market momentum is expected to remain bullish in the near term. However, post-budget reactions and global economic factors will play a crucial role in determining the sustainability of this rally. Investors will be closely monitoring policy announcements to assess long-term investment opportunities in high-growth sectors.