The upcoming week will be crucial for the market with major events lined up. Rail Budget, Macro Economic Survey and February Future and Options (F&O) expiry will be key for market next week. Also, this is the last trading week before the Finance Minister Arun Jaitley announces Budget FY17 on February 29. The Sensex marked biggest weekly gain in 2016 this week. The week was strong as equity benchmarks saw biggest weekly gains in 2016 on short covering, global rally and oil recovery. For the week, the Sensex and Nifty rallied 3 percent each, the biggest weekly upside in current calendar year and also the biggest since October 2015. The market is expecting nothing big from the Budget. The better prospects of growth will be definitely welcomed by financial markets. Kotak Securities does not expect any major initiatives for the stock markets. It believes focus of the markets will be largely on fiscal prudence, on effective implementation of investments, and on sectors which are impacted by the budget proposals. Some minor adjustments could be in offing for increasing retail participation in equities (directly/indirectly). “Reduction in Securities Transaction Tax (STT) will be cheered by the market, while any tax liability on Long Term Capital Gain (LTCG) will be a severe negative. Off-Budget investment and governance reforms announcements will continue to impact the market,” it says in a report. Motilal Oswal expects a blended excise duty increase of 10 percent which will effect ITC. It says that any increase in rural spending/infrastructure spending/tax exemption which can put money in hands of consumers in turn benefitting FMCG sector. Meanwhile, oil prices rose by more than 14 percent earlier in the week on Saudi Arabia and Russia’s agreement to freeze output at January levels. Oil and global markets will keep the Indian bulls and bears at work in the upcoming week. Macro data Nomura feels the government will meet its fiscal deficit target of 3.9 percent of GDP in FY16, but sees slippage to 3.7 percent of GDP in FY17. It feels that increase in the wages and pensions burden by Rs 1.1 trillion due to the Seventh Pay Commission and the One Rank One Pension scheme will be the main reasons for the slippage. According to Nomura, key areas in the budget are likely to include boosting rural infrastructure, public sector bank reforms, skilling and employment incentive and start up India. Nomura sees a GDP growth of 7.8 percent in the next fiscal. Moody’s Investors Service thinks Indian economy will grow at 7.5 percent in 2016 and 2017 as it is relatively less exposed to external headwinds, like China slowdown, and will benefit from lower commodity prices.