Six expectations from Budget 2021 for Commodity market by Kotak Securities
The focus of Budget 2021-2022 could be largely to mend the economy and boost growth and fight inflationary pressures. While the economy came under pressure, the commodities market was also not left unaffected. January 30, 2021 / 12:12 PM IST
The ruling BJP government is set to announce its eighth Annual Budget on February 1, 2021. The year 2020 was a challenging year for all major economies, including India, as governments imposed strict measures to limit the virus spread but this impacted economic growth.
We have now entered the New Year on an optimistic note as the vaccination process has begun fueling hopes of a recovery. However, economic recovery is expected to be slow and laboured and government support will be needed to boost the pace.
Commodities register cautious gains amid increasing challenges
One of the major reasons for the rally across asset classes in the last few months has been the huge influx of monetary inflows as central banks cut interest rates and infused liquidity to boost growth.
Ravindra Rao
Commodities traded near multi-month highs in last few weeks. However, we are seeing choppy trade amid increasing challenges.
Progress on the vaccine front, stimulus measures, optimism around Chinese economy and a weaker US dollar has kept the undertone positive for most commodities. However, rising virus cases, mixed economic data from major economies, Brexit uncertainty, delayed US stimulus deal and US-China tensions indicate that challenges are far from over.