Stock markets open firm on Budget Day; Sensex up over 500 points, Nifty nears 17,500-mark

The benchmark indices opened on a strong note on Budget Day. Sensex was up 544.97 points or 0.94 percent at 58,559.14. The Nifty was up 145.70 points or 0.84 percent at 17,485.50. About 1,510 shares have advanced, 473 shares declined, and 65 shares are unchanged.

Among early gainers at the opening bell were ICICI Bank (+2 percent), Infosys (+1.77 percent), Sun Pharma (+1.56 percent), Maruti (+1.45 percent), IndusInd Bank (+1.42 percent) and HDFC (+1.34 percent). ITC (-0.39 percent), PowerGrid (-0.21 percent) and NTPC (-0.14 percent) were among major losers.

Nifty opened gap-up on January 31 and rose slowly in the morning. At close, Nifty was up 1.39 percent or 237.9 points at 17339.9. In the process Nifty ended up being the best performer in the Asian region.

FY23 GDP forecast at 8-8.5 percent ahead of the Union Budget to be presented on February 1 by Finance Minister Nirmala Sitharaman enthused Indian markets. Nifty rose smartly on January 31 but ended up making a doji like pattern after a rise and made a triple top on an intra day basis. Advance decline ratio remains positive. The high of 17410 needs to be breached in which case 17,485 is the next resistance while 17,208 could act as a support. However, based on Budget pronouncements, the band of Nifty could widen.

The Nasdaq Composite recorded its biggest percentage drop in almost two years, as well as its worst January in over a decade, despite Monday’s broader rally in stocks — capping a brutal month for investors. Investors are also fearful about what a weak downturn in January means for returns for the remainder of the year, based on seasonal trends.

Gold marginally higher

COMEX gold trades marginally higher near $1797/oz after a 0.5% gain yesterday. Gold has edged up amid retreat in US dollar index from recent highs, mixed economic data and corporate earnings results, increased geopolitical tensions and inflation concerns, said Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securitie. ETF inflows also shows buying interest. However, stability in equity market has kept a check on upside. Gold has edged up after taking support near $1780/oz level and may now move towards the key $1800/oz level however a sharp upside is unlikely as Fed’s tightening stance may keep US dollar supported

Crude trades higher

NYMEX crude trades modestly higher above $88/bbl after a 1.5 percent gain yesterday. Crude trades near 2014 highs supported by supply risks amid increased tensions relating to Russia and Middle-east, said Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities. Recovery in US equity market and correction in US dollar index also lent some support. However, weighing on price is rise in US crude oil rig count to April 2020 highs and expectations of another increase in US crude oil stocks. Crude is still near recent highs indicating bullish sentiment however we may see some position squaring ahead of inventory report and OPEC+ meeting.

Asian stocks up

Asian stocks on Tuesday harnessed the tailwind from a technology-led rally in the US that was spurred by dip buyers betting this year’s equity rout is going to ebb. Several Asian markets including China and South Korea are shut for the Lunar New Year holiday.

Global stocks up

World stocks climbed higher on Monday as investors digested new optimism from the US Treasury's top economist that inflationary pressures should ease in 2022 due to weaker demand for goods, easing supply bottlenecks and a receding coronavirus pandemic.

On Wall Street, the Dow Jones Industrial Average rose 1.18 percent, while the S&P 500 gained 1.89 percent. The tech-heavy Nasdaq added 3.41 percent, but has borne the brunt of selling and is down 14% from a record peak last year. The MSCI World index, while higher on Monday, remains down 6.2 percent in January - the worst start to the year since 2016. Before Friday's rebound, the index had been headed for its worst January since the global financial crisis in 2008. It last gained 1.8 percent.

Eight core sectors growth up 3.8%

India's eight core sectors grew by 3.8 percent in December 2021, compared to 3.4 percent in November 2021, the government said on January 31. According to data provided by the Commerce Ministry, coal output rose by 5.2 percent, while that of refinery products increased by 5.9 percent. The increase in output in December 2021 was largest for natural gas, which posted an increase of 19.5 percent. Cement followed closely, with its output rising 12.9 percent.

GDP contracts by 6.6% in FY'21

India's GDP contracted by 6.6 percent in FY21, according to the National Statistical Office's first revised estimate released on January 31. The revised estimate compares favourably with the provisional estimate of a 7.3 percent contraction, released in May 2021.

GST collection crosses Rs 1.30 lakh cr mark

The goods and services tax (GST) collection crossed the Rs 1.30 lakh crore-mark for the fourth time as the government collected Rs 1,38,394 crore in gross GST revenue for January 2022, the finance ministry said on January 31. This rise is attributed to the trend of a 26 percent year-on-year increase in import of goods and revenues from domestic transactions, including import of services, which rose 12 percent over the preceding year.

The government's fiscal position remains comfortable, with data for the first nine months of the financial year showing that only half the budgeted deficit had been exhausted. For April-December FY22, the fiscal deficit stood at 50.4% compared to 145.5 percent last year. Stronger tax and non-tax receipts have helped the government stabilise its budget.

Oil prices up

Oil prices rose on Monday to end January with their biggest monthly gain in a year, boosted by a supply shortage and political tensions in Eastern Europe and the Middle East. The most-active Brent contract, for April delivery , traded 74 cents higher, or 0.8 percent, to settle at $89.26 per barrel.

Oil prices ended January about 17 percent higher in their biggest monthly gain in a year, boosted by a supply shortage and political tensions in Eastern Europe and the Middle East, Reuters said. The most-active Brent contract, for April delivery, traded 74 cents higher, or 0.8 percent, to settle at $89.26 per barrel. The front-month contract, for March delivery, which expired at the end of the session, rose $1.18, or 1.3 percent, to finish at $91.21.

US West Texas Intermediate crude rose $1.33, or 1.5 percent,, to close at $88.15 a barrel. In economic news, data showed euro zone economic growth slowed quarter-on-quarter in the last three months of 2021, as expected.

Results today

The following companies will release their quarterly results today: Tech Mahindra, Adani Ports and Special Economic Zone, Cholamandalam Investment and Finance Company, Elecon Engineering, Gujarat Ambuja Exports, IFB Industries, Indian Hotels, Indoco Remedies, Jubilant Ingrevia, Kansai Nerolac Paints, Laxmi Organic Industries, Mangalore Chemicals & Fertilizers, Procter & Gamble Hygiene & Health Care, Poonawalla Fincorp, Sona BLW Precision Forgings, Triveni Turbine, TTK Prestige, and VIP Industries.

(With additional inputs from Reuters and agencies)

Published on: Tuesday, February 01, 2022, 09:24 AM IST