Budget 2026: Muted Expectations, Fiscal Path & Bond Market Key for Stocks, says Axis AMC CIO

• Axis AMC CIO Ashish Gupta states market expectations for Union Budget 2026 are low, emphasizing fiscal discipline over new announcements.
• Gupta highlights that government has already implemented significant measures outside the Budget, limiting scope for major new policies.
• Investors will focus on fiscal consolidation plans, especially after a recent bond market sell-off, seeking comfort on bond supply and yields.
• Stability in tax policy, including capital gains and withholding tax review, is crucial for attracting debt flows back to India.
• Equity markets benefit from lower fiscal deficit, supporting reduced borrowing costs and improved credit growth; corporate earnings outlook in India has improved.

Why It Matters: Budget 2026 expectations are low; fiscal discipline, bond market stability, and tax policy are key for Indian stocks.