A HISTORIC DAY FOR INDIA
WORLD MARKETS
U.S. indices gained
0.3%-1.6%, with Nasdaq leading the tally and the S&P 500 notching its best
day since June 5 as tech shares rebounded from recent sell-off.
Biden dropped out of the
presidential race on Sunday and endorsed Vice President Kamala Harris as the
Democratic nominee.
China’s central bank
unexpectedly cut rates, with the short-term 7-day reverse repurchase rate
lowered to 1.7% from 1.8%.
U.S. 10-year treasury
yield rose 1 bps to 4.254%. Dollar index fell 0.1% to 104.28. Gold fell 0.2% to
$2396 per ounce.
Brent crude futures fell
47 cents to $82.16 per barrel and WTI futures fell 34 cents to $79.79 a barrel.
European markets gained 0.5%-1.3%.
AT HOME
After falling two third
of a percent in the initial trade, benchmark indices recouped most of the
losses to end just marginally lower ahead of tomorrow’s Union Budget. Sensex
settled at 80502, down 102 points while Nifty lost 15 points to finish at
24515. Nifty mid-cap and small-cap indices gained 1.3% and 0.9% respectively. Nifty
Auto index was the top gainer among the sectoral indices, up 1.2%, followed by
1.1% higher Pharma and Healthcare indices. Oil & Gas index was the top
loser, down 0.6%, followed by 0.5% lower Realty and Media indices.
FIIs net bought stocks and stock futures worth Rs 3444 cr
and 7383 cr respectively but net sold index futures worth Rs 1274 cr. DIIs were
net sellers to the tune of Rs 1652 cr.
Rupee ended flat at
83.66/$.
OUTLOOK
Today morning, Nikkei is
up 0.2% while Hang Seng and Shanghai are down 0.4% and 0.5% respectively. GIFT
Nifty is suggesting a modestly higher start for our market.
Today, Ms. Nirmala
Sitharaman will become India's first finance minister to present union budget
for the seventh consecutive time. The Budget is likely to be continuation of
the interim budget presented in February. Government is likely to opt for
fiscal prudence along with some welfare measures. Expenditure, tax revenue,
borrowings, interest payments and government capex targets are unlikely to see
big changes. The extra bounty received from bumper RBI dividend and higher tax
revenue can be used to reduce deficit, increase capex and some welfare measures
and breakup of same would be keenly watched.
From stock market
perspective, biggest thing to watch out would be whether there is any change in
equity taxation. While market is expecting streamlining of Capital Gains
structure, no change in 10% LTCG for listed equities is expected. However,
measures to curb F&O trading are feared. Some personal income tax sweetener
is also expected.
As far as sectors to
watch out are concerned, increased allocation for public capex will boost Infra
and Power stocks like like L & T, Powergrid, NTPC and Tata Power etc. If
rural allocation is increased, it will boost FMCG stocks. Affordable housing
push will boost housing finance/real estate stocks. Measures to encourage Green
Mobility will be positive for big auto stocks. Increased allocation for Defence
would boost stocks like HAL, Bharat Forge, BEL, Mazagaon Dock, Paras Defence
etc.
In yesterday's report we
had said that 24500-24450 was the immediate support zone, upon breach of which,
20-DMA, placed around 24250, would be next downside level to eye.
Nifty, after touching a
low of 24362, rebounded to end at 24509.
20-DMA, placed around
24300, is the immediate support to eye, upon breach of which, 34-DMA, placed
around 23900, would be next major support to eye; 24855, the top made on
Friday, is the immediate hurdle, upon crossover of which, 25350-25400 would be
next target area.
For Banknifty, 51749, the
low made last week, is the immediate support, upon breach of which, 34-DMA,
placed around 51500, would be next downside level to eye; 52800 is the
immediate hurdle on hourly chart, upon crossover of which, 53357, the top made
on 4th July, would be next upside level to eye.
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