14753 IS THE UPSIDE LEVEL TO EYE; 14000 IMMEDIATE SUPPORT

 

14753 IS THE UPSIDE LEVEL TO EYE; 14000 IMMEDIATE SUPPORT

 

WORLD MARKETS

 

Nasdaq surged 2.6% while S & P 500 and Dow rose 1.6% and 0.8% respectively, bouncing back from last week's steep losses. Technology related stocks led the advance, while a move by retail traders into silver drove up mining shares.

 

On the data front, ISM survey showed US manufacturing activity slowed slightly in January

 

On the stimulus negotiations front, 10 Republican senators sent a letter to Biden on Sunday asking him to consider a smaller, alternative Covid-19 relief spending plan.

 

Silver futures rose 8% to $29.06 an ounce, it's largest one-day pop since 2013, as the Reddit-fueled boom in highly shorted stocks appears to be spilling over into the metals market.

 

Shares of GameStop meanwhile, slid 30% on Monday, after a meteoric 400% rise last week.

 

Brent crude rose $1.22 cents, or 2.2%, to $56.26 a barrel. U.S. crude settled 2.6% higher at $53.55 per barrel.

 

European markets gained 0.9%-1.4%. Euro zone unemployment held steady at 8.3% in December. UK's final IHS Markit/CIPS manufacturing PMI reading came in at 54.1, down from a spike of 57.5 in December as businesses raced to beat the Jan. 1 Brexit deadline.

 

AT HOME

 

In a big Thumbs-up to Union Budget, Sensex and Nifty surged 5% and 4.7% respectively, registering their biggest gain since 7th April 2020 and recouping nearly 90% of the losses made last week. Sensex settled at 48600, up 2314 points while Nifty added 646 points to finish at 14281. Nifty mid-cap and small-cap indices rose 3.3% and 2% respectively. All the BSE sectoral indices ended higher with Bankex and Finance indices leading the tally, up 8.3% and 7.5% respectively.

 

FIIs net bought stocks, index futures and stock futures worth Rs 1494 cr, 2135 cr and 1350 cr respectively. DIIs were net sellers to the tune of Rs 90 cr.

 

Rupee depreciated 7 paise to end at 73.02/$.

 

What market liked about the budget was a big emphasis on growth without tinkering with existing tax structure/imposing fresh taxes. The budget pegged FY21 and FY22 fiscal deficit target at 9.5% and 6.8% of GDP respectively. Gross borrowing in FY22 is projected at Rs 12 lakh cr. There was a big Capex thrust as the Capex for FY22 was pegged at Rs 5.54 lac cr, a rise of 34.5%. There was no super-rich tax, hike in STT, Corporate TAx or Covid surcharge as feared by the market. Banks surged on the announcement that two more public sector banks, other than IDBI and two insurance companies including LIC, will be privatised in FY22. The budget pegged FY22 divestment target at Rs 1.75 lk cr. Also, an Asset Reconstruction Company will be established which will take over all stressed assets from bank books. In a big thrust to infrastructure, government announced setting up of a Development Finance Institution, which is expected to build a lending portfolio of at least Rs 5 lakh crore in three year. The budget proposed allocation of Rs 2.23 trillion on healthcare, a jump of 137%. FDI limit in insurance was hiked from 49% to 74%. Budget also announced voluntary vehicle scrappage policy to phase out old and unfit vehicles.

 

Eicher reported 8% y-o-y rise in January sales at 68887 units while Hero MotoCorp sales were down 3% at 4.85 lc units.

 

OUTLOOK

 

Today morning, Hang Seng and Nikkei are up 1.5% and 0.8% respectively while Shanghai is little changed. SGX Nifty is suggesting around 100 points higher start for our market.

 

In yesterday's report we had said that 13596, the bottom made Friday, was the immediate support while 14075, was the next hurdle, above which, 14300 would be the next level to eye.

 

Nifty crossed 14075 hurdle and surged all the way to 14336 before closing at 14281. The benchmark is set to open above 14350 today.

 

14753, the top made last week, is the next target/resistance to eye.

 

14000 is the immediate support on the hourly chart, with the stop-loss of which, trading longs can be held on to.

 

HDFC will report its quarterly earnings today.