The Union Budget disappointed
Indian markets on Saturday, as Sensex and Nifty settled with losses of around
2.50% each. Indices made a cautious start of the day, as the Controller General
of Accounts' data (CGA) showed that the government's fiscal deficit touched
132.4 per cent of the full-year target at December-end mainly due to slower
pace of revenue collections. Weakness remained over the street during the whole
trading day, amid the FICCI's Business Confidence Survey Report stating that
India Inc is facing huge risks from delays in necessary structural reforms in
the factor markets and lack of adequate credit availability to micro, small and
medium enterprises (MSMEs). In the second half of the trading session, losses
got intensified, after the government in its Union Budget announcements raised
fiscal deficit target to 3.8 per cent of the GDP from 3.3 per cent pegged
earlier for 2019-20 due to revenue shortage. Adding more worries, the Reserve
Bank of India (RBI) said that non-food bank credit growth decelerated to 7.0
per cent in December 2019 from 12.8 per cent in December 2018. Market
participants paid no heed towards Finance Minister Nirmala Sitharaman's
announcements over cut in personal income tax, extended tax benefits for
affordable housing and gave relief to companies on payment of dividend in the
Union Budget for 2020-21. Finally, the BSE Sensex slipped 987.96 points or
2.43% to 39,735.53, while the CNX Nifty was down by 300.25 points or 2.51% to
11,661.85.
The US
markets ended deeply in red on Friday amid lingering concerns about the
coronavirus outbreak, as the death toll from the disease continues to rise. The
latest figures from China's National Health Commission say that at least 213
people have died and about 9,700 have been sickened. The number of people
sickened by the new coronavirus in China now exceeds the global total infected
with severe acute respiratory syndrome, or SARS, which killed nearly 800 people
after emerging from southern China in late 2002 and spreading into 2003, but so
far the death toll from the current epidemic is lower. The UK and Russia have
also confirmed their first cases of coronavirus infection, raising concerns
about the rapid spread of the disease and the impact on the global economy.
Besides, adding to the worries, Delta and American Airlines recently announced
plans to suspend all flights to China as a result of the outbreak. On the economic
data front, personal income in the US increased by slightly more than
anticipated in the month of December, according to a report released by the
Commerce Department. The report said personal income rose by 0.2 percent in
December after climbing by a downwardly revised 0.4 percent in November. Street
had expected income to inch up by 0.1 percent compared to the 0.5 percent
increase originally reported for the previous month. Disposable personal
income, or personal income less personal current taxes, also crept up by 0.2
percent in December after rising by 0.4 percent in November. Meanwhile, revised
data released by the University of Michigan showed US consumer sentiment
unexpectedly improved in the month of January compared to the previously
reported deterioration. The consumer sentiment index for January was upwardly
revised to 99.8 from the preliminary reading of 99.1. The index is now up from
the final December reading of 99.3.
Crude
oil futures ended lower on Friday, weighed down by growing concerns about
outlook for energy demand due to the rapidly spreading coronavirus' potential
impact on the global economy. China's National Health Commission in its latest
data said that at least 213 people have died and about 9,700 have been sickened
by the coronavirus. Meanwhile, the US State Department urged Americans not to
travel to China. West Texas Intermediate (WTI), the US benchmark, logged a 4.9%
weekly fall, which led to a 15.6% January decline. That was the largest monthly
loss since a 16.3% May decline for the front-month contract. The March contract
for Brent, the global benchmark, lost 4.2% for the week, for a nearly 12%
January fall. Crude oil futures for March declined 58 cents or 1.1 percent to
settle at $51.56 a barrel on the New York Mercantile Exchange. March Brent lost
13 cents or 0.2 percent to settle at $58.16 a barrel on London's
Intercontinental Exchange.
Indian
rupee strengthened considerably against dollar on Friday on increased selling
of the American currency by exporters and banks. Sentiments remained positive
after the Economic Survey projected a GDP growth rate of 6-6.5% for the next
fiscal (FY21). The survey also noted that the government is committed to
supporting the micro, small and medium enterprises (MSME) sector, terming it an
important segment of the economy that fosters entrepreneurship and generates
employment opportunities at lower capital cost. However, strengthening of the
American currency vis-a-vis other currencies overseas along with losses in the
domestic equity market restricted the further up move. On the global front,
British Pound has on Friday extended its gains against the world's major
currencies following the Bank of England's decision to keep interest rates
unchanged and is now set to be the best-performing major currency of
January. Finally, the last traded price
of rupee was 71.34, 24 paise stronger from its previous close of 71.58 on
Thursday.
The
FIIs as per Friday's data were net buyers in both equity and debt segments. In
equity segment, the gross buying was of Rs 6401.33 crore against gross selling
of Rs 5775.41 crore, while in the debt segment, the gross purchase was of Rs
1697.99 crore with gross sales of Rs 1389.28 crore. Besides, in the hybrid
segment, the gross buying was of Rs 1.40 crore against gross selling of Rs 1.50
crore.
All the Asian markets are trading
in red on Monday on fears about the hit to world growth from the rapidly
spreading coronavirus. Indian markets ended sharply lower on Saturday as Budget
2020 announcements failed to live up to the expectations of the Street. Today,
the markets are likely to make gap-down opening of new week following sell-off
in Asian peers and concerns over economic growth of India. Investors will be
looking ahead to IHS Markit India Manufacturing PMI for the month of January
schedule to be released later in the day. Market participants will also be
looking ahead to the Reserve Bank of India (RBI) bi-monthly monetary policy meeting
which is scheduled during February 4-6, 2020. There will be some cautiousness
as economists at domestic rating agency Crisil doubt the budget attaining its
targets on growth, given the rural boost and thus consumption and revenue
realisations, saying planned budgetary measures are not expected to provide a
short-term boost. Noting that the economy is facing its worst slowdown in over
a decade, a Crisil report has said this was because consumption and investment
have stopped firing for too long. Also, traders will be concerned with the
Consumer Electronics and Appliances Manufacturers Association's (CEAMA)
statement that prices of consumer goods like refrigerators, ACs, coolers and
washing machines may rise in the short-term after the government's proposal to
increase basic customs duty on components like compressors and motors. Though,
some support may also come with SBI Research stating that the revised 3.8
percent fiscal deficit for FY20 looks ambitious as it is based on projected 18
percent rise in tax collections against a paltry 5.1 percent higher
realisaition so far, and around Rs 65,000 crore mop-up through disinvestment in
the last two months of the current fiscal. Also, foreign investors have pumped
in more than Rs 12,000 crore in stock markets in January, remaining net buyers
of Indian equities for the fifth consecutive month. In the equities segment,
FPIs invested Rs 7,547.8 crore in September, Rs 12,367.9 crore in October, Rs
25,230.6 crore in November and Rs 7,338.4 crore in December. There will be some
buzz in the coal stocks with a private report stating that India's coal import
increased by 7.6% to 185.88 million tonnes (MT) in the April-December period of
the current fiscal. Coal imports in December rose by 13.3% to 20.52 MT compared
to 18.10 MT in the year-ago month. There will be some reaction in insurance
stocks as the Budget set aside Rs 6,950 crore for recapitalisation of the three
public sector general insurance companies - National Insurance, Oriental
Insurance and United India Insurance.
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous
close
|
Support
|
Resistance
|
NSE Nifty
|
11,661.85
|
11,524.32
|
11,908.37
|
BSE Sensex
|
39,735.53
|
39,275.92
|
40,550.46
|
Nifty Top volumes
Stock
|
Volume
|
Previous
close (Rs)
|
Support (Rs)
|
Resistance
(Rs)
|
(in Lacs)
|
Yes Bank
|
1,016.55
|
37.90
|
36.93
|
39.53
|
SBI
|
618.42
|
302.60
|
291.72
|
318.07
|
Tata Motors
|
425.15
|
165.60
|
159.93
|
175.03
|
ITC
|
422.68
|
219.00
|
209.92
|
233.67
|
ONGC
|
312.83
|
104.35
|
101.52
|
108.37
|
Tata Motors has launched an engaging crowdsourcing platform, TACNet IdeaNation, in an attempt to address complex mobility issues.
Tech Mahindra is going to acquire 70 per cent stake in Bengaluru-based Cerium Systems at an enterprise value of up to Rs 245 crore.
M&M has reported auto sales performance for January 2020 which stood at 52,546 vehicles, compared to 55,722 vehicles during January 2019, registering a fall of 6%.
- Maruti Suzuki India has reported total sales of 154,123 units in January 2020, as compared 151,721 units in January 2019, registering rise of 1.6%.