Stocks Likely To Benefit From Government's Interim Budget Before Polls

Shares linked to rural spending and state-owned firms are likely to be a focus area in Finance Minister Nirmala Sitharaman's budget speech on Thursday.

Companies building roads, ports and airports are on traders' watchlist as Prime Minister Narendra Modi's administration is set to present its last budget before the national elections. Shares linked to rural spending and state-owned firms are likely to be a focus area in Finance Minister Nirmala Sitharaman's budget speech on Thursday, as policymakers seek ways to boost demand in the vast rural hinterland.

PM Modi has made infrastructure building a cornerstone of his economic policy, helping India expand faster than any other major economy. The optimism seeped into the nation's stock markets, which have advanced in all but one year since PM Modi first came to power in 2014. The enthusiasm has waned a bit this month, with foreign investors taking out more than $2.6 billion from local equities. 

The February 1 budget is an interim one until a new administration takes office. It will still be keenly followed as the proposals would indicate the government's assessment of the economy, with PM Modi widely expected to win a third term in the elections due around April-May.