ALL EYES ON BUDGET

 

ALL EYES ON BUDGET

 

WORLD MARKETS

 

US indices gained 1.1%-1.7% on the back of strong earnings and encouraging labour cost data.

 

The Employment Cost Index, a measure of wage increases, rose 1% last quarter, it's smallest advance since the fourth quarter of 2021 and followed a 1.2% gain in the July-September period. House price growth slowed considerably in November, with a 9.2% increase in the month.

 

Shares of General Motors, Exxon Mobil and PulteGroup jumped on the back of strong earnings.

 

US 10-year treasury yield fell 3 bps to 3.512%. Dollar index fell 0.2% to 102.09. Gold rose 0.3% to $1928 per ounce.

 

Brent futures rose 1% to $85.46 a barrel and WTI futures rose 1.3% to $78.87.

 

In Europe, FTSE fell 0.2% while DAX and CAC were little changed.  Euro zone economy grew 0.1% in the last quarter of 2022, beating estimates of a 0.1% contraction. On the flip side, German retail sales showed a surprise fall in December.

 

AT HOME

 

After falling more than half a percent in first hour, benchmark indices recouped all the losses and some more to end marginally higher. Sensex settled at 59550, up 49 points while Nifty added 13 points to finish at 17662. Nifty mid-cap and small-cap indices surged 1.6% and 2.9% respectively. BSE Utilities index jumped 2.2%, becoming top gainer among the sectoral indices, followed by 2.1% higher Industrials and Telecommunications indices.

 

FIIs net sold stocks, index futures and stock futures worth Rs 5440 cr, 1616 cr and 248 cr respectively. DIIs were net buyers to the tune of Rs 4506 cr.

 

Rupee depreciated 42 paise to end at 81.92/$.

 

OUTLOOK

 

Today morning, Asian markets are trading with gains of upto half a percent and SGX Nifty is suggesting around 60 points higher start for our market.

 

In yesterday's report we had said that 17300-17200 was the next support area for Nifty while 17900 was the immediate hurdle on the hourly chart, with the stop-loss of which, trading shorts can be held on to.

 

Nifty, after touching a low of 17537, rebounded to end at 17662.

 

17300-17200 continues to be next support area for Nifty as 17300 is where 200-DMA is placed while 17200 is the 78.6% retracement level of the 16747-18887 upmove; 17900 continues to be immediate hurdle on the hourly chart, above which, 18200, the top made last week, would be the next resistance to eye.

 

Finance Minister will present her last full budget before the 2024 elections today. In terms of big numbers to watch out, fiscal deficit for FY24 is expected at 5.9% of GDP, with gross and net borrowing pegged at Rs. 15.7 trillion and Rs. 11.3 tn respectively. In terms of tax proposals, markets would watch out for any changes to rationalise capital gains tax regime and measures to make new tax regime more attractive. In terms of growth measures, market is expecting increased spend for infrastructure which will include road, railway, defence, power, green energy, electric vehicle among others. Increase in social spending ahead of big election will boost FMCG stocks.