InvestorQ : Why did the defence, sugar and metal stocks gain in the markets post Budget?
Katherine Gonsalves made post

Why did the defence, sugar and metal stocks gain in the markets post Budget?

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rhea Babu answered.
3 months ago
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These were the 3 sectors that showed distinct gains in the post budget scenario. Here is the reasoning.

· Defence stocks like MTAR, Paras Defence, L&T, M&M and Bharat Forge gained 3-5% after the Budget 2022 promised increase local sourcing. The Budget set aside 68% of Defence capex for local manufacturers, against just 58% last year.

· Sugar stocks were the other big story of rally on Budget day. This was due to the penal additional excise duty of Rs.2 per litre on unblended fuel. This would encourage ethanol blending of fuel and will be positive for sugar companies with aggressive capacity expansion plans in ethanol. OMCs are likely to tilt more towards blending.

· Metal stocks benefited on two counts from the Union Budget 2022. The major infrastructure investments helped boost the demand for metals. Secondly, aggressive water scheme for 3.8 crore households implies an additional allocation of Rs.60,000 crore to ensure water supply, and is likely to boost for steel longs and pipes.

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