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Sensex up 473 pts ahead of Union Budget; Nifty above 8800

17:22

The News International Team

It was a fantastic Friday on Dalal Street as the bulls staged a come back just before the Union Budget. Banks, capital goods and auto stocks led the benchmarks higher whereas only FMCG was under pressure.

The 30-share BSE Sensex spiked 473.47 points or 1.65 percent to 29220.12 and the 50-share NSE Nifty jumped 160.75 points or 1.85 percent to 8844.60.

After having seen a pragmatic & a transformational railway budget, yesterday and painting an optimistic picture by the Macro-Economic Survey (for 2014-15) today, expectations raised from the Union Budget, say experts.

Finance Minister will be presented his Union Budget (FY16) speech on Saturday. The stock market will remain open tomorrow but bond markets will be shut.

Pratik Gupta of Deutsche Equities feels Union Budget will be growth oriented like the Rail Budget was. He expects much higher allocation to banks for recapitalization and says fiscal consolidation will remain a key. He also says the brokerage will buy Indian markets on every dip.
 
The Macro-Economic Survey for FY15 painted an optimistic picture says India has reached a sweet spot and there is scope for big bang reforms now. FY16 GDP growth is estimated at 8.1-8.5 percent. Economic Survey also says the government will adhere to a fiscal deficit target of 4.1 percent of GDP in FY15.

It also opens up space for the Reserve Bank of India to cut interest rates. Coupled with the forecast of a normal monsoon, this is likely to boost growth in the coming financial year.
 
“The investing community was clearly encouraged by the Economic Survey which pointed out that the current macroeconomic scenario in India is more favorable than in other economies,” says Devang Mehta, Senior VP & Head – Equity Advisory, Anand Rathi Financial Services.

Meanwhile, Prime Minister Narendra Modi says the government is ready to change Land Acquisition Bill if it is proved anti-farmer. He urged opposition to support Land Bill.

He also says the government has cracked down on black money by successfully seeking information from Swiss authorities. He claims that the coal auction will raise more money than Comptroller and Auditor General of India’s (CAG) estimated loss figure. He assures parliament that the fund flow will not stop to the UPA’s flagship NREGA scheme.

Telecom Regulatory Authority of India (TRAI) issued draft amendment to telecom tariff order 1999 for tariff revision. TRAI intends to reduce ceiling tariffs for national roaming services.

Stocks in Action

All sectoral indices except FMCG closed in green. BSE Realty and Capital Goods topped the buying list, up 4 percent each. Auto, Bank, Metal and Power indices gained 2-3 percent.

Tata Power was the biggest gainer on Sensex, up 5.4 percent followed by Larsen and Toubro with 4.7 percent upside after defence ministry shortlisted a consortium of Tata Power-Strategic Electronics Division (SED) and L&T for the battlefield management project.

The consortium of Rolta and Bharat Electronics also shortlisted for a Rs 50,000 crore mega defence order. Rolta rallied 18.7 percent and BEL was up 3 percent.

Among bluechips, ICICI Bank was the biggest contributor to Sensex’s gain, up 4 percent. State Bank of India gained 3.6 percent while its rivals HDFC Bank and Axis Bank were up 1.4 percent and 2.7 percent, respectively.

Sesa Sterlite, Tata Motors, Maruti Suzuki, Mahindra & Mahindra, NTPC, Hindalco, Coal India and BHEL gained 2-4 percent.

However, ITC lost 0.5 percent on fears of excise duty hike on cigarettes. GAIL fell 1 percent.

The broader markets too rallied in line with benchmarks. The BSE Midcap climbed 1.8 percent and Smallcap was up 1.4 percent. Advancing shares outnumbered declining ones on the Bombay Stock Exchange by 1821 to 1063.

On the global front, European markets were quiet in trade ahead of the second reading of the US Q4 GDP numbers today. Most Asian markets closed on a cautious note with the Kospi, Hang Seng and Straits Times registering minor declines. Oil staged a rebound after yesterday’s rout with Brent crude trading above USD 61 a barrel.

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