Experience teaches slowly and at the cost of mistakes.
Hopefully, the bulls will have learnt from past experience and will not go overboard with any sudden spurt. After a strong rally, we expect a subdued start as global markets have not extended this week’s spurt. However, the trading range could shift to 4900-5000 for the Nifty. A fall back to 4800 is not ruled out though and resistance is likely to kick in upwards of 5000. FII flows should turn positive, Budget should not disappoint and global situation must improve for a sustainable and meaningful advance above 5000.
Stocks in the budget-sensitive sectors could see action in the run-up to the big event. So, sectors like railways, power, infra, education, healthcare, fertilizers and textiles could hog the limelight. PSU oil marketing companies will gain in the wake of the reformist recommendations of the Kirit Parikh panel. The big question is will the Government bite the bullet on oil sector deregulation? The Government will also be hard pressed to return to the path of fiscal consolidation given the postponement of the 3G auction and expected shortfall in disinvestment proceeds.
Rising inflation and its fallout on the monetary policy could act as a dampener going ahead. Uncertainty over external factors like overheating in China, debt troubles in EU and fragile recovery in parts of industrialised world will continue to undermine sentiment.
Talking of global markets, private sector payrolls for January were down 22,000 in the US, the fewest since January 2008. Wall Street is now girding for Friday's employment report. There is a growing belief that job losses in the US economy are moderating.
As far Europe is concerned, Greece is not the only eurozone nation with debt problems, Spain and Portugal seem to be catching up fast. Outside the currency block, there could also be potential debt troubles in the UK and Japan.
After taking a pause on Monday, Indian markets resumed its road to recovery as the benchmark indices ended near day’s high. The Nifty regained the 4900 levels thanks to firm global cues and solid buying seen in the Metals and the Realty stocks. Even the Mid-Cap and the Small-Caps were in limelight. Bulls were in complete control throughout the day accompanied with good advance decline ratio and decent volumes.
The BSE Sensex advanced 333 points to end at 16,496 after touching a high of 16,525 and a low of 16,129. The Nifty lost 102 points to end at 4,932.
Equity markets in Asia ended in the green. The Nikkei in Japan was up 0.4%, while Australia's S&P/ASX ended higher by 1%. The Shanghai SE Composite rose 2.3% and Hang Seng index in Hong Kong was up 2.2%.
In Europe, stocks were trading positive. The DAX in Germany was up 0.4% and the CAC 40 index in France was up 0.4%. The FTSE in the UK was up 0.3%.
Coming back to India, all the BSE sectoral indices ended in the green. The BSE Metal index was the top gainer, advancing 4%, followed by the Realty index that was up 3% and the BSE Consumer Durable index was up 2.6%. The BSE Mid-Cap index fell 1.2% while BSE Small-Cap index added over a percent.
Among the 30-components of Sensex 29 ended in the positive terrain and only Sun Pharma ended in the red. L&T, HDFC, ICICI Bank, ITC and Tata Steel were among the top gainers.
Outside the frontline indices, the big gainers in the broader market were M&M Fin, KSK Energy, Mphasis, HDIL and Castrol India. On the other hand, losers included Spice Comm, Jain Irrigation, Power Grid and GE Shipping.
Shares of L&T surged 4% to end at Rs1449 after the company’s Buildings & Factories Operating Company - part of its Construction Division - bagged new orders aggregating to Rs11bn recently for the construction of residential tower, ware houses, mall, & a factory building project.
L&T has secured a Rs5bn contract from M/s Raghuleela Lessors & Developers Pvt Ltd (Wadhwa Group) for the construction of residential towers "The Address" at Ghatkopar(W), Mumbai.
In yet another development, Rs3.05bn contract has been secured from M/s Arshiya International Limited for the construction of Ware houses & Allied Infrastructure works at Khurja, Uttar Pradesh.
Further orders worth Rs2. 95bn has been secured from various esteemed clients for construction of a mall at Kolkata and a factory building at Samalkha, Haryana.
Shares of NTPC gained 2% to end at Rs210. The public sector company’s FPO was oversubscribed by 0.60x while the QIB book was fully subscribed. SBI and LIC have reportedly invested Rs47.6bn in the FPO.
Inox Leisure purchased 43.28% in Fame India for an all-cash deal of Rs664.8mn. Inox acquired up to 1,50,57,760 shares of Rs10 each of Fame India, by way of a block trade in a single.
The acquisition will be followed by an open offer to buy another 20% in Fame. The transaction is entirely funded by Gujarat Fluorochemicals. Inox is the wholly owned subsidiary of Gujarat Fluorochemicals. This acquisition will create the largest multiplex networks with a total of 55 multiplexes, 204 screens and 57,891 seats.
Shares of Inox Leisure shot up by over 12% to end at Rs85. On the other hand, shares of Fame India surged by 5% to end at Rs46.
Shares of Bharat Electronics surged by 2.5% to end at Rs1988 after the company won Rs48bn order from Indian Air Force. The scrip opened at Rs1960 it touched an intra-day high of Rs2068 and a low of Rs1959 and recorded volumes of over 46,000 shares on BSE.
Shipping Corporation of India (SCI) announced that the board of directors has decided to obtain the approval of the members of the Company for increasing the borrowing power limits from existing Rs50bn to Rs120bn under section 293(1)(d) through Postal Ballot.
The stock edged higher by 0.5% to end at Rs154, the scrip opened at Rs155 it touched an intra-day high of Rs157 and a low of Rs152 and recorded volumes of over 96,000 shares on BSE.