ALL EYES ON BUDGET

 

ALL EYES ON BUDGET

 

WORLD MARKETS

 

US indices soared 1.2%-3.4%, extending Friday's upmove, which helped cut monthly losses.

 

The yield on the benchmark 10-year Treasury note was flat at 1.778%. Dollar index slipped 0.6% to 96.65, posting its largest daily fall since last November. Gold rose 0.3% to $1797 per ounce.

 

Brent crude rose 1.3% to $91.21 and WTI crude settled 1.5% higher at $88.15 per barrel.

 

In Europe, FTSE was flat while DAX and CAC gained 1% and 0.5% respectively. Euro zone GDP growth slowed in the fourth quarter, in line with expectations, rising 0.3% quarter-on-quarter for a 4.6% annual gain.

 

The S&P 500 and the Nasdaq Composite fell 5.3% and 8.9% respectively in January, posting their worst months since March 2020. Dow declined 3.3% for the month.

 

AT HOME

 

Benchmark indices climbed 1.4% each, registering their biggest jump after 3rd January. Sensex settled at 58014, up 814 points while Nifty added 238 points to finish at 17340. Nifty mid-cap and small-cap indices rose 1.6% and 1.1% respectively. Except a 0.01% lower Metal index, all the BSE sectoral indices ended in green, with Realty and IT indices being the top gainers, up 3.2% and 2.7% respectively.

 

FIIs net sold stocks worth Rs 3624 cr but net bought index futures and stock futures worth Rs 1295 cr and 2095 cr respectively. DIIs were net buyers to the tune of Rs 3649 cr.

 

Rupee appreciated 43 paise to end at 74.61/$.

 

Economic Survey 2021-22, tabled by FM Sitharaman today, projected India's FY22 and FY23 to be 9.2% and 8-8.5% respectively. Growth will be supported by “widespread vaccine coverage, gains from supply-side reforms and easing of regulations, robust export growth, and availability of fiscal space to ramp up capital spending," the Survey added.

 

OUTLOOK

 

Markets in mainland China, Hong Kong, South Korea and Singapore are closed for a holiday. SGX Nifty is suggesting around 140 points higher start for our market.

 

Finance Minister Nirmala Sitharaman will present her fourth Budget today. The focus of the budget is expected to be on further accelerating India's pace of recovery from the pandemic shock. Healthcare, MSME and export, Infrastructure, Real estate, Green Energy, Electric Vehicle and Insurance sectors are expecting favorable announcements in the budget. On the flip side, any increase in LTCG rate/holding period, if comes, will be negative.

 

In yesterday's report we had said that 34-DMA, placed around 17500, continued to be immediate hurdle while 16836, the low made last week, continued to be important immediate support.

 

Nifty, after touching a high of 17410, eased to end at 17340. The benchmark is set to open above 17450 today.

 

34-DMA, placed around 17500, continues to be immediate hurdle, upon crossover of which, 20-DMA, placed around 17770, would be the next upside level to eye. In case 17770 is also taken out, 18350, the top made in January, would be the next big target.

 

16836, the low made last week, is the immediate support to eye. If this level breaks, 200-DMA, placed around 16650 and 16410, the low made in December, would be the next support levels to eye.

 

38855, the top made in January, is the upside level to eye for Banknifty, upon crossover of which, 40160 and 41830 would be the next big levels to eye; 37000 is the immediate support upon breach of which, 36375, the low made last week, would be the next downside level to eye.