ALL EYES ON INTERIM BUDGET

 

ALL EYES ON INTERIM BUDGET

 

WORLD MARKETS

 

U.S. indices tumbled 0.8%-2.2% after Federal Reserve Chair Jerome Powell signaled a March rate cut is unlikely.

 

Powell said in a press conference that the Fed would need to see more favorable data to be sure it was time to lower rates.

 

U.S. 10-year treasury yield fell 12 bps to 3.916%. Dollar index inched up 0.1% to 103.51. Gold inched up 0.1% to $2039 per ounce.

 

WTI crude future fell 2.5% to settle at $75.85 a barrel and Brent future settled at $81.71 a barrel, down 1.40%.

 

Main European markets fell 0.3%-0.5%.

 

For the month, U.S. indices gained 1-1.6%. U.S. crude and the global benchmark Brent rose 5.86% and 6.06% in January for their first monthly gain since September.

 

AT HOME

 

Benchmark indices surged nine tenth of a percent each, nearly recouping all of yesterday's losses. Sensex settled at 71752, up 612 points while Nifty added 203 points to finish at 21725. Nifty mid-cap and small-cap indices soared 1.6% and 2.2% respectively, both hitting record highs and the latter posting best gain in 10 months. All the NSE sectoral indices ended higher, with Healthcare and Pharma indices being the top gainers, up 2.8% and 2.7% respectively.

 

FIIs net bought stocks, index futures and stock futures worth Rs 1661 cr, 802 cr and 3736 cr respectively. DIIs were net buyers to the tune of Rs 2543 cr.

 

Rupee appreciated 7 paise to end at 83.04/$.

 

For the month, Nifty was flat while Sensex fell 0.7%.

 

OUTLOOK

 

Today morning, Hang Seng is up 0.7% but Nikkei and Shanghai are down 0.8% each. GIFT Nifty is suggesting a marginally higher start for our market.

 

In yesterday's report we had said that 21500-21450 was the immediate support zone on the hourly chart while 21912, the 78.6% retracement level of the recent fall from all-time high, continued to be next upside target.

 

Nifty, after touching a low of 21449, rebounded to end at 21725.

 

21912, the 78.6% retracement level of the recent fall from all-time high, continues to be next upside target, upon crossover of which, 22124, the top made in January, would be next upside level to eye; 21449, the low made yesterday, is the immediate support, upon breach of which, 21137, the low made last week, would be next downside level to eye.

 

For Banknifty, 46580, the top made last week, is the next upside level to eye above which, 47812-48000, the gap created by gap-down opening on 17th January, would be next target zone; 45100 is immediate support on the hourly chart, below which, 44430, the low made last week, would be next downside level to eye.

 

FM Sitharaman will present her sixth consecutive budget today.

 

Key expectations are that allocation to PM Kisan scheme will be hiked from Rs. 6000 to Rs. 9000. Rural Housing scheme may also get a boost. Focus on infrastructure is likely to continue with enhanced allocation for road, railway and defence. To boost manufacturing in India, tweaks in PLI schemes and tariff cuts might be done. Schemes for green energy transmission is also possible.

 

Fiscal deficit is widely expected to be pegged at 5.3% for FY25, down from 5.9% projected for current fiscal. Capex is expected to grow by nearly 10%. Nominal GDP growth is expected at 10.5%. Overall tax growth is expected at around 12%. Net market borrowing is seen at 12 lk cr.

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