Finance Minister Nirmala Sithraman is set to present the Union Budget 2020 today amid concerns over a massive economic slowdown, high unemployment, declining savings and a slump in consumption.

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CNBC-TV18’s Anuj Singhal explains how the market set-up is looking ahead of the Budget and what the key expectations are:

Weak market:

The market is slightly weaker than the last budget. Last year, the market went into the budget with all-time highs. This time, the market has corrected about 3.7 percent mainly because of the global cues and coronavirus.

However, there is a big hope-trade, which has played out in the midcaps and the smallcaps. This year, the midcap index is up 5 percent and smallcap index is up 7 percent on betting big on growth.

What is priced in and what the market wants: The market wants the government to go after growth and fiscal expansion.

Three kinds of taxes the market is hoping: Personal tax cut, tweaking with the dividend distribution tax (DDT) and changes in long-term capital gains tax.

What one can bet on: The market is already betting on auto stocks, Escorts, Bajaj Auto, UltraTech Cement, Larsen and Toubro (L&T), etc.

Post Budget, can the market see sell-off?: The market, because its position is slightly lighter compared to the last Budget, may not sell off.

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