Sensex and Nifty started on a strong footing ahead of the Union Budget presentation at 11 AM today. The S&P BSE Sensex was up 443 points, or 0.7 per cent, to quote at 59,993. The Nifty50, meanwhile, was hovering around 17,800-mark. Union Finance Minister Nirmala Sitharaman will present Budget 2023 in Parliament today, the last full Budget of the Modi government in its second term. This year’s Budget holds much significance as the country is scheduled to have the next Lok Sabha election in April-May 2024.
ICICI Bank, UPL, Britannia, Hindalco, Divis Labs, JSW Steel, and Tata Consumer Products were the top gainers on the Nifty50 index, advancing up to 2 per cent in early deals. Adani Enterprises, BPCL, Coal India, ITC, Cipla, and Sun Pharma, on the contrary, were the major laggards, down in the range of 0.1 per cent to 0.5 per cent.
In the broader markets, the BSE MidCap and SmallCap indices added 0.7 per cent and 0.5 per cent, respectively.
The Union Budget presentation for financial year 2023-24, will be the single biggest trigger for stock market investors on Wednesday, February 1. Union Finance Minister Nirmala Sitharaman will present the Budget in Parliament today, the last full Budget of the Modi government in its second term.
This year’s Budget holds much significance as the country is scheduled to have the next Lok Sabha election in April-May 2024.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said: “The massive FPI selling in Indian markets have impacted market sentiments. NSDL data shows FPI selling of Rs 28852 crores in January. The actual selling in the cash market is a mammoth Rs 53887 crores in January. FPIs are selling in India and buying in cheaper markets like China, Hong Kong and South Korea where valuations are attractive. This “short India and long other cheaper markets” strategy has led to big underperformance of the Indian market, so far this year.”
“While China, Hong Kong and South Korea are up by 5.4 %, 10.4% and 8.4% respectively in January India is down by 2.4%. This kind of underperformance is unlikely to last long. FIIs are also hugely short in the derivatives market. If the budget turns out to be good, with no unpleasant surprises, there can be short covering leading to spurt in the market. On the other hand, if there is some negative proposal like hiking the LTCGs tax to 20%, FIIs will continue to sell, pushing the markets further down. The Economic Survey reflects optimism on the growth and corporate earnings front. This augurs well for the markets in the medium term,” he added.
Global Cues
Asia’s stockmarkets steadied on Wednesday, with signs of a slowdown in U.S. wages bolstering hopes that the Federal Reserve could hint at an end to interest rate hikes at its meeting later in the day.
Oil prices climbed on Wednesday underpinned by a weaker dollar, which fell on signs of slowing inflation in the United States, easing fears that the world’s largest oil user may face a recession because of further interest rate hikes.Brent crude futures gained 20 cents, or 0.2%, to $85.66 a barrel at 0128 GMT, while U.S. West Texas Intermediate (WTI) crude futures rose 34 cents, or 0.4%, to $79.21 a barrel, extending gains of about 1% in the previous session.
Tokyo stocks opened higher Wednesday following rallies on Wall Street, where US employment data helped allay concerns over wage inflation.The benchmark Nikkei 225 index was up 0.77 percent, or 210.57 points, at 27,537.68 in early trade, while the broader Topix index added 0.67 percent, or 13.26 points, to 1,988.53.
Major U.S. stock indexes closed over 1% higher on Tuesday as labor cost data encouraged investors about the Federal Reserve’s aggressive approach to taming inflation a day ahead of the central bank’s critical policy decision.
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