HERE COMES THE BIG DAY
WORLD MARKETS
US indices gained in the vicinity of half a percent, snapping a two-day losing streak after minutes from the Federal Open Market Committee's June policy meeting pointed to the likely end of the asset-buying program in October.
Also boosting the sentiment was strong quarterly earnings from Alcoa which bolstered optimism about the second-quarter earnings season.
Mortgage Bankers Association reported a rise last week in applications to buy a home, even as mortgage rates climbed.
European markets, except a 0.3% lower FTSE, gained between 0.4%-0.9%.
Nymex crude tumbled 1.1% to $102.3 a barrel; Gold rose 0.6% to $1324 an ounce.
AT HOME
After Tuesday's mayhem, benchmark indices lost another half a percent in yesterday, going weak into today's Union Budget. Sensex lost 137 points to settle at 25445 while Nifty finished at 7585, down 38 points. BSE mid-cap and small-cap indices plunged 1.4% and 1.8% respectively. BSE Auto and Power indices were the top losers among the sectoral indices, giving away 2.4% and 1.7% respectively while Oil & Gas and FMCG indices gained 0.8% each.
FIIs net bought stocks and stock futures worth Rs 645 cr and 457 cr respectively but net sold index futures worth Rs 663 cr. DIIs were net sellers to the tune of Rs 265 cr.
Rupee ended at 59.75/$, appreciating 3 paise compared to previous close.
Finance Minister tabled the Economic Survey in the Parliament yesterday. The survey projected India's GDP growth for 2014-15 at 5.4%-5.9%. It however, cautioned that a poor monsoon and investment climate may pose downside risks to the economy. It has spelled out three major reforms for government's expenditure: shifting subsidy programmes away from price subsidies to income support, a change in the focus of government spending towards provision of public goods, and improvement in systems of accountability.
Indusind Bank met street expectations with the April-June quarter net profit rising 25.7% to Rs 421 cr. NII rose 17.7% to Rs 800 cr and other income grew 22.5% to Rs 576.4 cr. Net interest margin however declined marginally to 3.66% from 3.75%. Gross NPAs were steady at 1.11% as against 1.12% q-o-q and Net NPA was unchanged at 0.33%.
OUTLOOK
China has reported June trade data which is poorer than expected but stronger than that of May. Exports are up 7.2% y-o-y, up from 7% gain in May but below a projected 10.6% rise. Imports are up 5.5%, swinging from a 1.6% drop in May. Trade surplus totalled $31.6 bn, missing a prediction of $36.9 bn and is also narrower than May's $35.9 bn.
Asian markets are trading mixed with modest changes and SGX Nifty is suggesting about 20 points higher opening for our market.
All eyes today would be on the maiden budget of the Narendra Modi government. Reviving growth momentum while maintaining the fiscal prudence will be the key challenges for Arun Jaitley.
Market is expecting that the 4.1% fiscal deficit target given by Chidambaram in the interim budget is likely to be revised upwards to about 4.4% as tax revenue expectations are scaled down and fertiliser and fuel subsidy bill is brought to realistic level. However market would want a clear roadmap for reduction in fiscal deficit in coming years. Other key expectations are roadmap for GST and DTC, clarity on retro taxation, allowing FDI in defence sector, reduction in MAT, cut in customs duty on coal and gold, specific measures to boost power and infra space and increasing the 80C limit.
In yesterday's report we had mentioned that Nifty had broken the higher-top higher-bottom formation on the hourly chart and next meaningful support on the way down is 7530, the 34 DMA. Nifty, after rising to 7646 in the initial trade, plunged all the way to 7551 and finally settled at 7578.
34 DMA, placed around 7540, continues to be immediate support on the way down below which 7441, the immediate previous bottom on the weekly chart would be the key support to eye. Immediate resistance on the hourly chart is placed around 7725, a sustained trading above which is required to generate a buy signal on the hourly chart.
Traders are advised to wait for the breach of 7725-7540 levels for taking a fresh directional view on Nifty.
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