Market Live: Street gets set for Budget; Sensex cuts some gains, Nifty above 11,050

Thu Feb 01 2018
Rajesh Sharma (2068 articles)
Post Market
Market Live: Street gets set for Budget; Sensex cuts some gains, Nifty above 11,050

11:28 am First reaction: “The budget has a clear agriculture push as expected. A number of initiatives for Agriculture and Food Processing have been announced.  Policies like MSP being at 1.5 times the cost of produce need to be understood, to assess impact of inflation on Agri Commodities,” Anil Rego of Right Horizons has told Moneycontrol.

11:25 am Market Check: The market is now strengthening its position and extending gains. The Sensex is up over 200 points, while the Nifty is almost touching 11,100 now.

The 30-share index is up 235.43 points or 0.65% at 36200.45, and the Nifty up 68.90 points or 0.62% at 11096.60.

About 1532 shares have advanced, 830 shares declined, and 207 shares are unchanged.

 

11:23 am Agri reforms: Finance Minister announced a slew of reforms in the agricultural sector.

Below are the highlights of what he announced.

    • Setting up an agricultural market fund with corpus of Rs 2,000 crore.
    • Grameen agricultural market to enable farmers selling directly to buyers
    • Will look at cluster development model for horticulture & agri crops
    • Organic farming to be encouraged via cluster model for farming
    • Food processing sector growing at 8% per annum
    • Govt to launch ‘operation green’ with corpus of Rs 500 crore
    • State of art facility to be set up in 42 food parks for agri exports

11:20 am Market Check: The Sensex has gained over 200 points now, while the Nifty is nearing 11,100 now.

The market breadth is also positive as 1522 shares have advanced, 839 shares declined, and 201 shares are unchanged.

Shares of Kaveri Seed Company and Jain Irrigation have gained around 3 percent after the Finance Minister Arun Jaitley announced the hiking of minimum support ptice (MSP) to 1.5 times of Kharif crop.

11:13 am GDP growth: Finance Minister Arun Jaitley said manufacturing sector is back on growth path. “6.2 percent GDP growth has signalled turnaround in economy and India achieved 7.5 percent average growth in first three years of NDA government. The focus is now on agriculture, improving education & better health,” he told during the speech.

11:11 am Market Check: At 11:11 hrs IST, the Sensex is up 179.11 points or 0.50% at 36144.13, and the Nifty up 51.90 points or 0.47% at 11079.60.
About 1466 shares have advanced, 876 shares declined, and 202 shares are unchanged.

 

11:10 am Ease of doing business: Modi articulated vision of minimum government and maximum governance. “This transformation is reflected in improvement of India in WB ease of doing business with India breaking into top 100 for the first time.

11:07 am Jaitley speech: Indian economy has been performed well since 2014, becoming USD 2.5 trillion economy. It is 7th largest economy and is expected to move to 5th position soon, he said.

11:05 am Jaitley begins his speech: “Four years ago, we pledged to the people of India to give this nation an honest government. We promised to reduce poverty, expedite infra creation and build strong confident new India. When we took over, India was considered part of fragile five and we have decisively reversed this. Government led by Narendra Modi, has implemented structural reforms. As a result, India is among fastest growing economies of the world,” FM Jaitley said in his introductory note to the Budget.

11:03 am Lok Sabha: The Lok Sabha is observing silence to mourn the death of a Member of Parliament.

11:01 am Budget action: The Parliament is getting ready for the Union Budget. The Session has begun and Finance Minster will be presenting the Budget shortly.

10:58 am Market Check: Marginal cuts are visible on the market ahead of the Budget Speech at 11 am. The Sensex is up 120 points, while the Nifty is just above 11,050.

About 1414 shares have advanced, 892 shares declined, and 199 shares are unchanged.

L&T and TCS are the top gainers, while Coal India, Tata Steel and Vedanta were the top losers.

10:56 am Top Gainers on BSE Smallcap: 

 

10:52 am Manufacturing PMI: Following December’s strongest improvement in 60 months, growth momentum across India’s manufacturing economy lost some impetus as output, new orders and employment rose at slower rates during January, Nikkei IHS Markit said in its report.

Encouragingly, new export orders rose at the sharpest pace since September 2016. On the price front, input cost inflation remained marked and broadly similar to December’s eight-month high. In spite of increased cost pressures, firms were restricted in their ability to fully pass these on to clients due to intense competition. As a result, charges rose only marginally, it added.

The Nikkei India Manufacturing Purchasing Managers’ Index (PMI) fell from December’s 60-month high of 54.7 to 52.4 in January. This was consistent with a modest improvement in operating
conditions across India’s goods producing economy. Notably, the headline PMI Index registered below the long-run average (54.1). Growth was registered across all three broad market groups, led by consumer goods.

10:48 am Key ministers arrive at the Parliament: 

 

10:45 am Budget expectations: “This is a keenly awaited budget- especially because this is a year ahead of elections.  The finance minister will have to balance between political considerations and fiscal discipline.  FIIs would be keenly watching this.  One of the key consideration for markets is whether the finance minister would introduce Long Term Capital Gains Tax (LTCG) on equities.  There have been a lot of rumours doing the rounds.  With some expectation buildup over the last few days on this, just non introduction of LTCG could be viewed positively by markets.  One expects a continued thrust on disinvestment as a means to fund possible initiatives.  One expects thrust on agriculture (also keeping in mind elections are round the corner and also continued focus on infrastructure to propel growth.  One also hopes that simplification is given sufficient focus so as to improve the ease of doing business,” Anil Rego, ‎Founder & CEO – ‎Right Horizons said.

10:40 am Auto sales: Country’s largest car maker Maruti Suzuki India has posted a 4.8 percent growth year-on-year in January sales, driven by compact cars (like Dzire, Baleno, Swift) and utility vehicles (Vitara Brezza, Ertiga).

The company sold 1,51,351 units in January 2018 against 1,44,396 units sold in January 2017.

Domestic sales grew by 5 percent year-on-year to 1,40,600 units and exports increased 2.8 percent to 10,751 units.

10:36 am Expert view: Independent market analyst Ambareesh Baliga told Moneycontrol, “LTCG is something which most of the market players would be watching out for – However from an economy perspective I would watch out on how FM plans to trigger Private Investments into creating new capacities and infrastructure (it’s been a decade since the slowdown of Private Investments).  Affordable Housing has been the buzzword with further expectation of sops – wonder what more FM can provide (could be a disappointment for those expecting sops).”

10:33 am Budget Expectations: Manishi Raychaudhuri, BNP Paribas told CNBC-TV18 in an interview that imposition of long-term capital gain tax (LTCG) would depress sentiment on the Indian market because none of the other large markets have LTCG tax.

If the tax is only for domestic investors and not FIIs even then since the recent fund flows suggest that they have come from domestic investors more, that would also not be welcome at this time. It is unlikely that the government would like to puncture the sentiment in the equity market at this point, he says.

10:30 am Agri stocks: Fertiliser and rural-focused stocks are buzzing right now. The Street is looking forward to a Budget  which will be rural-focused.

 

10:25 am Result Poll: Commercial vehicle maker Ashok Leyland is expected to report profit growth of 143 percent at Rs 393.6 crore for December quarter compared to Rs 161.8 crore in year-ago.

The stock rallied around 40 percent in last 12 months.

Revenue from operations during the quarter is seen rising 51 percent to Rs 6,836 crore compared to Rs 4,516.3 crore in same quarter last year, according to average of estimates of analysts polled by CNBC-TV18

10:20 am Fortis Healthcare extends losses: Shares of Fortis Healthcare fell around 10 percent intraday as investors continued to be cautious of the stock after the Delhi HC verdict on Wednesday.

The HC upheld the arbitration award, which asked Singh brothers to pay Rs 3,500 crore to Daiichi.

10:15 am Rupee update: The rupee weakened by 9 paise to 63.67 against the US dollar in opening trade at the interbank foreign exchange market ahead of the budget today.

A strong dollar in overseas markets weighed on the Indian currency, a currency dealer said. Yesterday, the rupee had ended 2 paise higher at 63.58 against the US dollar.

 

10:10 am UBS View: The global research firm believes that the valuation right now in the market is rich on a fundamental basis. Further, it said that it is tough to argue for a correction, given the fund flows as well as global rally.

Moreover, fiscal deficit numer will be an important factor to watch out for, Gautam Chhaochharia of UBS told CNBC-TV18 in an interview.

10:07 am Market Check: The market has extended its gains from the morning session. The Sensex is trading above 36,100 now.

The Sensex is up 216.41 points or 0.60% at 36181.43, and the Nifty up 59.10 points or 0.54% at 11086.80. The market breadth is positive as 1451 shares advanced, against a decline of 622 shares, while 185 shares are unchanged

Larsen & Toubro, TCS, and M&M are the top gainers, while Dr Reddy’s, Tata Steel, Bharti Infratel and Vedanta lost the most.

10:01 am Budget action: Finance Minister Arun Jaitley has arrived at the Parliament and will be presenting the Budget shortly.

 

9:52 am Buzzing Stock: Shares of Quess Corp added 3.8 percent intraday Thursday as the company has acquired 100 percent in HCL Computing Products.

The administrative committee of the company at its meeting held on January 31 considered and approved the acquisition of 100 percent equity stake in HCL Computing Products for Rs 30 crore.

HCL Computing Products is a subsidiary of HCL Infosystems, and said acquisition will be completed on or before March 31, 2018.

The company also signed definitive agreements to acquire 100 percent equity in Monster (India) and Quesscorp Holdings Pte Ltd., a subsidiary of Quess Corp, has signed definitive agreements to acquire 100 percent equity in Monster.com SG Pte Ltd., 100 percent equity in Monster HK Limited and 49 percent equity in Monster Malaysia Sdn Bhd.

9:45 am Expert Speak: In an interview with CNBC-TV18, Arvind Sanger, Managing Partner of Geosphere Capital Management, Katalin Gingold, Managing Director-Equity Research at Cartica Management and Adrian Lim of Aberdeen AMC shared their expectations from Union Budget 2018.

If there is a fiscal discipline is not maintained and you don’t see continuous fiscal consolidation, which would be negative potentially for the market, certainly, it could be negative for the currency. It could be negative for inflation, Sanger said.

 

9:33 am Market Check: The Indian market is trading strong on the Budget Day, led by gains in Bank Nifty among other sectoral indices. Midcaps have continued their corrective phase. The Nifty midcap index is down about half a percent.

The Sensex is up 128.89 points or 0.36% at 36093.91, and the Nifty up 30.90 points or 0.28% at 11058.60. The market breadth is positive as 1084 shares have advanced, 548 shares declined, and 157 shares are unchanged.

L&T and M&M are the top gainers on both indices, while Tata Steel, Infosys, Vedanta and Bharti Infratel lost the most.

 

9:27 am Buzzing Stock: Shares of Larsen and Toubro gained over 3 percent intraday after the company posted better results for the December quarter.

The infrastructure giant reported a 48.41 per cent jump in its consolidated net profit at Rs 1,618 crore for the third quarter ended December 31, 2017.

It had reported a net profit of Rs 1,090 crore in October-December quarter in the year-ago period, L&T said in a filing to the BSE.

L&T’s total income was up 9.03 per cent during the quarter under review to Rs 28,960.36 crore as against Rs 26,561.25 crore of the corresponding quarter.

Its total expenses stood at Rs 26,420.43 crore, up 6.17 per cent, as against Rs 24,882.85 crore of Q3/FY 2017-18.

9:23 am Escorts gains: Shares of Escorts has gained over 2 percent intraday as the company reported steady tractor sales as well as financial results for the December quarter.

Escorts’ agri machinery segment (EAM) in first month of 2018 has reported healthy growth of 45.6 percent compared to year-ago month, driven by domestic sales.

The company sold 5,316 tractors in the month gone by, increased from 3,652 tractors sold in January 2017.

9:15 am Market opens: The market has begun the Budget Day trading session on a positive note, with the Sensex gaining over 100 points.

The Sensex was up 126.19 points at 36091.21, while the Nifty was up 40.70 points at 11068.40. The market breadth was narrow as 385 shares advanced, against a decline of 216 shares, while 122 shares are unchanged.

Larsen & Toubro, SBI, and HPCL gained the most on both indices, while NTPC and Infosys have lost the most.

The Bank Nifty is trading 0.28 percent higher. Other sectoral indices are trading in the green, barring Nifty pharma.

L&T gained 2.4 percent on better than expected earnings. ICICI Bank cut opening losses to trade 0.4 percent lower, after earnings.

JSW Steel was up 1 percent and Vedanta declined 1 percent post earnings.

Quess Corp gained 2 percent after acquisition of two companies.

9:14 am IIFL view: The focus for today undoubtedly will be on Finance Minister Arun Jaitley as he lays out details of the Union Budget. Investors will hope there is continued commitment to fiscal consolidation and no additional tax burden on capital market investments. Areas like infrastructure and affordable housing, healthcare, job creation and rural development would get attention.

The market, which extended its losses on Wednesday is set to open flat. Expect volatility to set in towards noon as the fine print of the budget is analyzed.

Meanwhile, the Federal Reserve left rates unchanged and said it expects economic conditions will evolve in a manner that will warrant further gradual increases in the federal funds rate.

9:08 am Pre-opening: The pre-opening rates have settled. It indicates a steady opening for the market on Budget day. At 09:08 hrs IST, the Sensex is up 83.93 points or 0.23% at 36048.95, and the Nifty up 17.20 points or 0.16% at 11044.90.

9:04 am Trade Setup: The Nifty, which started on a muted note, recouped losses but failed to hold on to gains and closed near its opening levels forming an indecisive Doji kind of pattern on the daily candlestick charts.

A ‘Doji’ is formed when the index opens and then closes approximately around the same level but remain volatile throughout the day which is indicated by its long shadows on either side. The body will be insignificant which will appear like a plus sign on the charts.

For bulls to regain control of this market, Nifty should reclaim 11,111-11,200 to extend its upmove towards 11,250-11300 levels. A tight stop loss should be kept for all long positions, suggest experts. Find out all about the trade setup.

Read: Trade setup for Thursday: Top 15 things you should know before Opening Bell

8:57 am ‘Budget for the people’:

 

8:55 am SGX Nifty: Trends on the SGX Nifty indicates a positive opening, up around 23 points on the Singaporean exchange.

8:52 am Expert View: The government is likely to present a balanced budget, wherein more focus is expected on rural and infrastructure sectors. Traders and investors would keenly watch how it manages to restrict its fiscal deficit target and deliver on the rising expectations. We would see high volatility throughout the trading session. Thus, we would advise traders to remain hedged, while investors should use any dip as a buying opportunity after some healthy correction seen in the Smallcap and Midcap spaces in the last few days, Jayant Manglik, President, Religare Broking said in a statement on Wednesday.

8:49 am Stock picks: The all-important Budget is here. Bonanza Portfolio expects volatility to extend further. The index has a bunch of supports around 10980-10880 holding same levels we expect the index to touch fresh highs and on higher side 11130-11180 would be strong hurdles, it said. Here is a list of three stocks which can give up to 14% return in short term.

TV18 Broadcast: BUY | Target Rs 70| Stop Loss 57| Upside 13%

The stock is trading in a super uptrend as we have witnessed a healthy correction after every rise and the recent correction from 66.50 levels can be considered as a healthy correction again.

On Wednesday’s session, the stock moved up to 6 percent in an intraday basis with a strong volume hinting that the stock may continue its overall uptrend.

On the daily charts, it seems that the stock has broken from its bullish flag pattern with good volume which is bullish in nature.

Considering technical setup, one can initiate a buy call on the stock at current levels to any dip near 59.50 for the target of 70 with a stop loss below 57 on a closing basis.

PVR: BUY | Target Rs 1600 | Stop Loss Rs 1360| Upside 10%

The stock formed a base near 1280 levels after correcting from the previous high of 1650 and we have seen a good pullback from 1280 which suggest strong support is formed near 1280 levels.

On the daily chart, the stock broke its Cup and Handle pattern recently with good volume which is bullish in nature suggest stock ready to trade higher.

The stock breached all the strong DMA’s like 200-100-50 that shows strength is back in stock.
The momentum traders can take a position in the counter at current levels to any dip near 1400 for the targets of 1600 and a stop out levels can be kept below 1360 on a closing basis.

JM Financial: BUY | Target Rs 185 | Stop Loss Rs 150 | Upside 14%

The stock is trading in a strong uptrend since long and the recent correction from the top can be considered as a healthy correction. The stock has taken support at 68.20% retracement zone from April month low.

After consolidating at strong support for the past two months, the stock has recently given small breakout above the range with good volume and again the stock has taken support from the same levels which suggest that it is all set to continue its overall uptrend soon.

Traders can initiate a long call on the stock at current levels to any dip near 158 for the target of 185. A stop loss can be kept below 150 on a closing basis.

Disclaimer: The author is Senior Research Analyst, Bonanza Portfolio Ltd. The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions

8:47 am Budget action: Finance Minister Arun Jaitley has left his residence to head towards North Block in New Delhi.

8:42 am Asian Markets: Asian indexes climbed after stocks in the region sold off earlier this week. The advance also followed moderate gains on Wall Street following the Federal Reserve’s decision to keep rates unchanged.

The benchmark Nikkei 225 index surged 1.42 percent, as investors looked to snap a six-day losing streak. Energy-related stocks were higher as oil prices recovered: Inpex rose 1.87 percent and JXTG Holdings gained 3.03 percent.

8:38 am Wall Street close: US stocks rose, capping off a strong start to 2018. The Dow Jones industrial average and S&P 500 notched their best monthly performances since March 2016.

The Dow gained 72.5 points to close at 26,149.39, with Boeing rising 4.9 percent and hitting an all-time high. The S&P 500 rose 0.1 percent and finished at 2,823.81, with real estate as the best-performing sector. The Nasdaq composite advanced 0.1 percent to close at 7,411.48.

8:30 am Fed leaves rates unchanged: In Janet Yellen’s final meeting as Fed chair, the central bank decided Wednesday against increasing its benchmark interest rate but indicated it expects inflation pressures to heat up as the year moves on.

The policymaking Federal Open Market Committee said current conditions indicate that the overnight funds rate should remain anchored at 1.25 to 1.5 percent. The decision, which came at the end of a two-day meeting, was widely expected.

Rather than looking for a move on rates, market participants were watching the January Fed meeting for clues on how the central bank might proceed for the rest of the year.

8:21 am Sectoral expectations: Dinesh Rohira of 5nance.com shares his views on different sectors.

He believes that with the government keenly focusing on an upliftment of social welfare through infra and agricultural spending, it also maintained a tight stance on fiscal target on the backdrop of improved efficiency on revenue collection.

Also Read: Follow all stories related to the Union Budget here.

“With private investment poised to rebound in current fiscal coupled with formalization of the economy into one stream, the consumption theme is certainly expected to poise uptrend for sectors herein,” he said in a statement.

Here are his key expectations:

FMCG – One of the immediate beneficiary post-budget session from consumption theme will be FMCG companies which has undergone structural changes in terms of revenue model with majority of contribution coming from rural segment. The expectation in increase for stimulus during budget for the rural farm in the form of higher allocation to MNREGA and other rural employment initiatives will enable the FMCG firms to capitalized on volume. Further, the expectation on corporate tax rate from 30 per cent to 25 per cent is expected to benefit this companies.

Banking – The recent announcement on recapitalization process for PSU banks worth over Rs. 88000 crores in current fiscal coupled with clear roadmap on merger plan for the weak PSU banks is certainly expected to boost the capital growth in banking sector. Further, with support from initiative like “housing for all’ and huge spending on infra projects by government is likely to boost the credit take-off in segment, and thus enabling growth opportunity on longer horizon.

Fertilizer The current budget being a last presentation given the 2019 general election, it is expected to be relatively populist budget focusing on agricultural and rural population. This in turn is expected to benefit fertilizer producers by channelling cheaper financing and gain tax break. Further, during the last budget the fertilizer subsidy stood at Rs. 70,000 crores which is expected to be similar in current budget, giving smooth breather for the producers.

8:10 am Overnight developments: Before we move on to domestic developments, here’s a look at what has changed for the Indian market overnight. From Wall Street and Asian market’s moves to actions on the FOMC front, a look at what could affect the D-Street today as well. You can read the details here.

Also Read: India Union Budget 2018-19 Live: News, updates and highlights from FM Arun Jaitley’s Budget 2018 speech, announcements.

India Union Budget 2018: What does Finance Minister Arun Jaitley have up his sleeve? Click here for top and latest Budget 2018 news, views and analyses.

Rajesh Sharma

Rajesh Sharma

Rajesh Sharma is Correspondent for Stock Market of South East Asia based in Mumbai. He has been covering Asian markets for more than 5 years.

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