'Foreign outflow doesn't mean negative India fundamentals'

The budget is unlikely to cause a meaningful shift in the assessment of equities from a medium-term perspective, and so investors should look at markets through a fresh lens to identify which newer themes could emerge as winners, said Harish Krishnan, chief investment officer - Equity at Aditya Birla Sun Life AMC Ltd.

- Dipti Sharma & Srushti Vaidya

The budget is unlikely to cause a meaningful shift in the assessment of equities from a medium-term perspective, and so investors should look at markets through a fresh lens to identify which newer themes could emerge as winners, said Harish Krishnan, chief investment officer - Equity at Aditya Birla Sun Life AMCLItd.

After the budget classified tax on buybacks as capital gains, some relief for buybacks may help return excess capital in a few mature companies, which can then be recycled into newer capital-intensive opportunities, said Krishnan.

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The fiscal deficit is narrowing. Are we spending less, and what does it show?

In an environment of elevated global uncertainties, the Indian government continued its path of prudence—resorting to realism rather than rhetoric. Unlike most major economies, which have continued to expand their unconventional fiscal policies (high fiscal deficits sustained for much longer, tariff uncertainties, etc.), India has chosen to maintain its glide path toward fiscal discipline. There has, however, been a shift in its priorities.

Thus, in our opinion, from the supply side stimulus, policymakers are moving towards domestic consumption.

What are your thoughts on the budget from an equity standpoint?

From an equity market, higher Securities Transactions Tax (STT) on Futures and Options to temper very high participation seen in markets does seem a bit of a surprise, which equity markets will have to digest, and possibly any changes in long term capital gains—either for domestic investors or foreign investors will have to wait some more time, as there were no changes in this budget.