Budget's influence on short-term market performance is declining: Morgan Stanley

The Union budget is going to be a"market-neutral" event as policymakers are not likely to change their policy stance and will continue to focus on fiscal consolidation, says a Morgan Stanley report.     

"We do not expect major changes in the conduct of fiscalpolicy and hence, view the budget as a market-neutral event," Morgan Stanley said in a research note.     

The Union budget for 2017-18 is due to be presented on February 1.     

According to Morgan Stanley India Strategist Ridham Desai, the budget's influence on short-term market performance is declining.     

"Market participants will have to deal with a fair amount of volatility on the budget day though even this volatility has been declining over the past 25 years," Desai said.     

Sector-wise, the budget is expected to be positive for autos, cement and metals, consumer, Internet and e-commerce, media and real estate.

For sectors like financials, information technology, oil and gas and utilities, budget proposals are expected to be neutral.     

The report said the pace of fiscal consolidation will be slower than what was planned earlier as the support from