Budget 2012: 5 Stocks to Watch Out


Bangalore: As the Union Budget is upcoming, fiscal consolidation and removal of securities transaction tax (STT) on stock trades tops the list of demands of market participants.

According to experts, investors are expecting for additional asset sales by the government to control the nation's expanding fiscal deficit which may exceed government target of 4.6 percent. A top government official said India's fiscal deficit is likely to surpass the government's target of 4.6 percent of the gross domestic product (GDP) for FY12 by 1 percent to around 5.6 percent.

The government's unfortunate fiscal management has been a main distress for both foreign and local investors who are concerned regarding the prospects of Asia's third largest economy. According to media reports this time prospects are high that the STT will be cut and the finance ministry may agree to foreign investors to directly buy corporate bonds.

Experts say that the budget should focus on agriculture by maintaining and even increasing the target of credit flow to the sector by banks and financial institutions. Furthermore it is broadly estimated that the government may boost tax rebate under section 80CCF on investment in infrastructure bonds from the present level of 20000 to 50000.

Zee Entertainment Enterprises

Zee Entertainment approved from 140 to 124 in the previous week after rallying from 115 odd levels in the previous month. At present the stock is trading above the 200 DMA and the momentum indicators advise that the stock could rally again in the next couple of weeks. The upside target for the stock is 145 and the stock has got intermediary resistance at 136 and 140. Nonetheless, a stop loss of 122 has to be sustained.