In the run up to the vote-on-account, markets may rise over the next few days even as global markets seem to have absorbed the worst economic news. While a large upmove from the current Nifty levels of 10887 on January 15, 2019 seems unlikely, Nifty can still attempt to rise to 11,200-11,300 levels before correcting. In the process, a lot of stocks and sectors may sequentially undergo upward correction of the recent fall.

We do not expect too many changes in the vote on account or Interim Budget. While some reliefs that no political party can dare to roll back (like raising exemption limit for individuals under Income Tax Act, some relief measures for rural population etc) can be expected, no measures that will have a substantial impact on businesses are expected.

The accompanying speech may include a lot by way of vision statement for the next 3-5 years, its implementation will be postponed to the new govt.

Dealing with agri stress and generation of employment could be key focus areas in the Budget speech. Equity markets may expect little from the vote-on-account, the speech may give media and analysts enough to debate upon.

The markets would be driven more by the macro developments across the globe hinting at the pace of slowdown, Q3 corporate results outcome and political noises, arrangements leading to shifting expectations about the post poll arithmetic.

Early Q3 results have been mixed bag with large IT, media and textile companies doing well while retail, FMCG, Banks, Metal companies have reported lacklustre numbers.

Recent macro data and industry sales numbers raise the possibility of growth remaining sluggish for a few more months. While this is not a positive development for the markets, the sooner it gets discounted, the better it will be on actual reporting of numbers.   

Deepak Jasani is head, retail research at HDFC Securities