Expectations from the Union Budget, and then the proposals that come up when it is presented on Thursday, 28 February, will determine the market's trend next week. Global factors will have an impact, but not to any significant extent, as investor attention will mostly be centred around what the budget has in store for the next financial year.
Investors will be looking out for some positive measures from the government on the reforms front. It is expected that there will be some measures to encourage more investments from domestic, and foreign investors, as well.
It needs to be seen what the government proposes to do to plug the huge fiscal deficit. Some positive announcements on that front will help lift investor sentiment to a significant extent. And then, as always, proposals on direct taxes, customs, excise duties and service tax will also make an impact on price movements next week.
Shares from realty and infrastructure sectors will see some brisk activity ahead of the budget, amid expectations the government will spell out some positive proposals on these fronts.
Investors will be reacting to the Railway Budget on Tuesday (26 February). With the near month derivatives contracts expiring on 28 February, movements are likely to be quite volatile next week. And, with the budget in focus as well, volatility may rise to a higher degree at times.
With the budget due on Thursday and data on sales and shipments data from automobile and cement manufactuers to be released on Friday, there will be fairly hectic activity in automobile and cement sectors.
Investors will also be eying the data on manufacturing activity in February. The Market Economics' HSBC India Manufacturing PMI will be released on Friday.