A budget is just a method of worrying before you spend money, as well as afterward.
The Big Budget day is here. Some will cheer the ‘aam admi’ initiatives and others will lament on another opportunity lost. No point in speculating now on what it will have in store for the India Inc. and the people in general and the markets in particular. Let’s wait and listen. With the Finance Ministry having accepted most recommendations of the 13th Finance Commission, there is not much suspense left so far as fiscal consolidation is concerned.
The fact that the fiscal stimulus has to be unwound is a no-brainer; depending on what is in store, the manufacturing sector, especially the auto and cement companies could be impacted. Some announcement on GST implementation is likely. A few sops may be retained for sectors that are yet to recover fully. How the Finance Minister plans to reduce the fiscal deficit will hopefully be unraveled soon. It will be interesting to here on the disinvestment target for the next fiscal.
Expectations of big bang reforms are minimal. One space which needs to be dealt with urgently though is the huge subsidies, especially to the oil and fertilizer sectors. Whether the Finance Minister takes any concrete step in this direction is anybody’s guess. On the whole, the market will be volatile, which is a given on the Budget day. The start will be nervous due to mixed global markets.
Technically, the Nifty may face resistance at 4950 and has support at 4800. The market could break the current consolidation phase if this range is broken on either side. A fall below 4800 may take the Nifty as low as 4730. On the upside, selling pressure may kick in at around 5000.
FIIs were net sellers in the cash segment on Thursday at Rs5.95bn on a provisional basis while the local funds were net buyers of Rs3.25bn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net buyers of Rs6.45bn. On Wednesday, FIIs were net buyers of Rs6.16bn in the cash segment.
Thursday turned out to be another session of consolidation where the benchmark indices traded in a narrow range throughout the day. BSE Sensex was unable to bounce back despite an upbeat Economic Survey. Even a sharp rise in India’s core sector growth was unable to cheer sentiment on Dalal-Street.
Production at India's six key infrastructure industries rose by a strong 9.4% in January 2010 as against 2.2% in the same period last year, Commerce & Industry Ministry said in a statement today. Growth in India's infrastructure sector stood at 6.4% in December 2009 and was at 6% in Nov. 2009 and 3.8% in Oct. 2009.
In addition, with the Railway Budget turning out to be more populist one and international equity markets not that encouraging, traders and the investors continued to remain cautious ahead of the Union Budget 2010-11.
Finally, the BSE Sensex ended flat at 16,254 it hit an intra-day high of 16,329 and intra-day low of 16,167. While the NSE Nifty ended flat at 4,859.
Among the 30-components of Sensex, 16 ended in the negative terrain and 14 ended in the green. Hindustan Unilever, Tata Motors, JP Associates, NTPC and RCom were among the top losers. On the other hand, major gainers were L&T, Maruti, Hero Honda, Infosy and ACC.
Outside the frontline indices, the big losers in the broader market were Mphasis, Godrej Cons, Renuka Sugars and Jet Airways. On the other hand, gainers included GVK Power, Mundra Port, REC and Piramal Health.
Food price inflation yet again marginally fell to 17.58% in the week ended February 13, 2010 as against the same period last year. Primary Articles inflation fell to 15.84% in the week ended February 13, 2010 as against 16.23% in the same period last year. While, Fuel price inflation remained unchanged at 9.89% on a YoY basis.
Hathway Cable & Datacom, one of the largest Cable TV services company of India started trading at Rs250 per share as against its issue price of Rs240. However, the stock fell below its issue price and ended at Rs207, translating into a discount of 13.5%.
The company entered the capital market with 227,55,000 equity shares of Rs 10 each for cash at a price band of Rs240 to Rs265 through 100% book building process. The IPO just managed to get subscribed by 1.36 times on the final day of offer. Most of the bids came at the lower end of the price band.
The QIBs portion of the issue received subscription of 1.43 times with bids for 16714925 equity shares against the offer of 11655000 equity shares.
The Non Institutional Investors portion of the issue received bids for 11895750 equity shares against the offer of 2775000 equity shares resulting in a subscription of 4.28times. The Retail Individual Investors portion of the issue received subscription of 0.2754 times with bids for 2292300 equity shares against the offer of 8325000 equity shares.
ICICI Bank raised interest paid on deposits of select maturities by 25 to 50bps. The move came after HDFC Bank raised some deposit rate by 0.50% to 1.50% from February 19, 2010. The new rates have come into effect from today, Rahul Virkar, the spokesman was quoted as saying.
Shares of ICICI Bank advanced 1.2% to end at Rs851. The scrip opened at Rs841 it touched an intra-day high of Rs857 and a low of Rs832 and recorded volumes of over 4.3mn shares on NSE.
Shares of Kotak Mahindra Bank surged 3.2% to end at Rs729 after the National Stock Exchange in its circular announced that the bank would replace Grasim Industries in the S&P CNX Nifty Index.
On the other hand, shares of Grasim ended flat at Rs2660. The scrip opened at Rs2655 it touched an intra-day high of Rs2705 and a low of Rs2601 and recorded volumes of over 0.17mn shares on NSE.
Cadila Healthcare announced that the board of directors recommended to issue Bonus Equity Shares in the ratio of 1:2 of Rs5/- each held by the shareholders of the company on the record date to be fixed by the board of directors / committee of the board after the approval of the shareholders at a general meeting.
The stock gained 1.5% to end at Rs752. The scrip opened at Rs746 it touched an intra-day high of Rs765 and a low of Rs718 and recorded volumes of over 0.2mn shares on NSE.
Aurobindo Pharma received tentative approval to manufacture and market Nevirapine Tablets for Oral Suspension 50mg (NDA) from the US Food & Drug Administration (USFDA).
The stock ended slightly lower by 0.7% to end at Rs923. The stock opened at Rs917 hitting an intra-day high of Rs933 and a low of Rs917. It recorded volumes of over 0.15mn shares on NSE.
Shares of Gammon India erased early gains and ended lower by 1.6% at Rs212. The company announced that it has won an order worth Rs1.37bn from the International Society for Krishna Consciousness. The scrip opened at Rs223 it touched an intra-day high of Rs226 and a low of Rs210 and recorded volumes of over 0.2mn shares on NSE.
Promoters of Texmaco are reportedly planning to restructure its group companies i.e the engineering firm Texmaco and Texmaco Machines. It is looking to demerge Texmaco’s heavy engineering and steel foundry divisions and transfer the same to its wholly-owned subsidiary Texmaco Machines.
As per the scheme approved by an independent committee of directors, Texmaco’s heavy engineering & steel foundry business, along with its assets and liabilities, will get transferred to Texmaco Machines, an existing company.
The stock slipped 1.7% to end at Rs140, it opened at Rs141 it touched an intra-day high of Rs143 and a low of Rs134 and recorded volumes of over 2.3mn shares on NSE.