STAY LONG WITH THE STOP-LOSS OF 17244

 

STAY LONG WITH THE STOP-LOSS OF 17244

 

WORLD MARKETS

 

US indices gained 0.7%-0.8%, extending the winning streak to third straight day.

 

ISM manufacturing index for January rose 7.9 percentage points to 76.1%.

 

US 10-year treasury yield inched up 1 bps to 1.791%. Dollar index fell 0.4% to 96.27. Gold inched up 0.2% to $1800 per ounce.

 

Brent crude declined 10 cents, or 0.11%, to $89.16 per barrel while WTI crude advanced 5 cents, or 0.06%, to settle at $88.20 per barrel.

 

European markets gained 1%-1.4%. Eurozone GDP growth slowed in fourth quarter to 0.3% q-o-q for an annual gain of 4.6%. French January inflation eased to 3.3% from 3.4% in December and above an average forecast of 3.0%.

 

AT HOME

 

Stock market gave the budget a thumbs-up as benchmark indices surged nearly a percent and half, extending yesterday’s prebudget upmove. Sensex settled at 58862, up 848 points while Nifty added 237 points to finish at 17576. Nifty mid-cap and small-cap indices gained 1.1% and 0.6% respectively. BSE Metal and Basic Materials indices gained the most among the sectoral indices, rising 4.9% and 3.2% respectively while Oil & Gas and Auto indices were the top losers, down 0.9% and 0.7% respectively.

 

FIIs net sold stocks and index futures worth Rs 22 cr and 415 cr respectively but net bought stock futures worth Rs 2107 cr. DIIs were net buyers to the tune of Rs 1598 cr.

 

Rupee depreciated 18 paise to end at 74.79/$.

 

Union Budget presented by Finance Minister Niramal Sitharaman was growth focused with big focus on infrastructure.

 

As far as macro numbers are concerned, FY23 GDP growth has been projected at 8%-8.5% compared with an estimated 9.2% for the current fiscal year. FY22 fiscal deficit is projected at 6.9% of GDP while that for next fiscal is pegged at 6.4%. Government will be borrowing Rs. 14.95 trillion from the market.

 

As far as allocation is concerned, Capital Expenditure has been upped 35.4% to Rs. 7.50 lk cr. Also PM Gatishakti programme has been emphasized with focus on roads, railways, airports, ports, mass transport, waterways and logistics. Here, National Highways Network will be expanded by 25000 km in FY23. Allocation of Rs 60000 cr has been made for "Har Ghar Nal Se Jal" scheme while Rs. 48000 cr has been allocated for PM Housing scheme.

 

ECLGS scheme for MSMEs has been extended to March 2023 and an additional Rs. 50000 cr has been allocated for the same.

 

To boost manufacturing, 15% lower tax rate for manufacturing unis has been extended for one more year till March 2024. Also, 68% of defence procurement budget has been earmarked for domestic industry.

 

On the much awaited clarification, any income from transfer of any virtual digial asset wil be taxed at 30%. Also, India will introduce digital rupee to be issued by RBI in FY23.

 

FY23 disinvestment target has been pegged at Rs. 65000 cr, which is conservative.

 

GST collection in January stood at Rs 1.41 lakh cr, the highest since the inception of GST.

 

January trade deficit rose to $17.94 from $14.49 bn a year ago.

 

OUTLOOK

 

Markets in mainland China, South Korea, Hong Kong and Singapore are closed today for the Lunar New Year holidays. SGX Nifty is suggesting around 110 points higher start for our market.

 

In yesterday's report we had said that 34-DMA, placed around 17500, was the immediate hurdle, upon crossover of which, 20-DMA, placed around 17770, would be the next upside level to eye.

 

Nifty crossed 17500 and surged all the way to 17622 before closing at 17576. The benchmark is set to open near 17650 today.

 

20-DMA, placed around 17770, is 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; 17244, the low made yesterday, is the immediate support on the hourly chart, with the stop-loss of which, trading longs can be held on to.

 

38855, the top made in January, is the upside level to eye for Banknifty, upon crossover of which, 40160, the top made in November, would be the next target; 37600 is the immediate support, with the stop-loss of which, trading longs can be held on to.

 

HDFC and Tata Consumer Products will report their quarterly numbers today.