Ridham Desai, head of India Equity Research at Morgan Stanley, on Monday, said that the stock market's reaction to the Union Budget 2020 was fair as the investors expected this Budget to be "different" but it was "just another". "The market was disappointed," he said.

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Finance minister Nirmala Sitharaman presented the Union Budget 2020 in the Parliament on Saturday with the key announcements being the new tax slabs, proposal to raise banks' deposit insurance, LIC IPO launch, among others. Among the things that got costlier are cigarettes, tobacco products, medical equipments and others due to hike in taxes.

“Market’s reaction is fair because, in the run-up to the Budget, there was some expectation building up that this may be a platform for some major announcements. It is not necessary. We have seen in recent years that the Budget is not being used as a platform for announcements, a lot of announcements and reforms are made outside the budget platform. But nevertheless, the market did get signals from the government that maybe this is going to be a different type of a Budget and to the extent that it was just another Budget," Desai told CNBC-TV18.

According to Desai, no announcements regarding the LTCG tax and less rural spending were among the main reasons behind the disappointment in the stock market.

However, Desai said that going forward, he hopes that the market will react positively as "the government has concentrated all its efforts in the same direction that it has been over the last four-five months, it is being very consistent, it is not dispersing its revenues in different directions, it is focusing on lifting corporate savings. That to my mind is very big positive to the stock market."

Desai continues to remain positive on domestic cyclicals. "I am buying discretionary consumption, which is doing a whole lot better than staples. I would have changed that view if I had seen major rural stimulus in this Budget but it is not there. So I don’t think there is any reason for us to switch back to staples. So we prefer discretionary over staples. So we buy autos over fast-moving consumer goods (FMCG),."

Desai is also positive on banks but selectively. "We tend to be more selective there. We prefer the corporate banks and some of the really beaten up non-banking financial companies (NBFCs)."