Market Opens:
Benchmark indices opened higher on Thursday with Nifty trading around 10,700.
At 09:17 hrs IST, the Sensex is up 205.23 points at 35796.48, while Nifty is up 44.40 points at 10696.20. About 532 shares have advanced, 242 shares declined, and 26 shares are unchanged.
Tata Steel, RIL, Grasim, Vedanta, ICICI Bank, UltraTech Cement, Coal India, UPL, Eicher Motors are trading higher, while BPCL, IOC, HPCL, Bharti Infratel, Adani Port, HDFC, Zee Entertainment are among losers.
All the sectoral indices are trading in green, midcap index is up 0.50 percent.
Rupee Opens:
The Indian rupee gained in the early trade on Thursday. It has opened higher by 17 paise at 70.95 per dollar versus previous close 71.12.
Global Markets :
US stocks surged on Wednesday after the Federal Reserve said it would be patient in lifting borrowing costs further this year, reassuring investors worried about a slowing economy.
The Federal Reserve left the key US lending rate unchanged on January 30, and said it would be "patient" about making any further changes, in the clearest signal yet the central bank has heeded concerns about the economy.
The FOMC increased the benchmark rate four times last year but rising concerns about a slowing US economy, amid a trade war with China, prompted officials to signal they will take time to gauge the economy's performance.
While the US Fed continues to emphasize that US economy is fine fettle with labour market dynamics and wage growth improving, cross currents across the globe remain concerning. Economic slowdown in China and Europe, Brexit uncertainty and tightness in financial conditions are clearly now a vital parameter for the Fed to assess future policy path.
SGX Nifty:
Trends on SGX Nifty indicate a positive start for the broader index in India, a gain of 71.50 points or 0.67 percent. Nifty futures were trading around 10,708-level on the Singaporean Exchange.
Asian markets at 4-month high:
Asia stocks rose to a four-month high on Thursday, tracking Wall Street, after the Federal Reserve pledged to be patient with further interest rate hikes, signalling a potential end to its tightening cycle amid signs of slowing global growth.
Crude Update:
US oil prices edged up on Thursday to extend gains into a third session, with widely watched data showing signs of tightening supply in the United States.
Domestic Market :
The market continued to consolidate for second consecutive session and closed the day on a flat note Wednesday as traders remained cautious ahead of expiry of January derivative contracts, and the outcome of Federal Reserve meeting. Traders also await Interim Budget scheduled to be announced on Friday.
The market sentiment is slightly cautious ahead of the Interim Budget on February 1.
The Interim Budget would provide an opportunity for the government to outline its medium-term economic priorities, specifically with regards to improving farm/rural incomes. However, for retail, there may not be anything to cheer but stock-specific opportunities will keep D-Street busy
Given the expected shortfall in GST revenues, lower-than-expected non-tax receipts, and higher budgetary spends; we expect the fiscal deficit target to get revised upwards by ~26 bps to 3.5% for FY19 from 3.3% pegged earlier.
These sectors will be in most focus:
Consumer: ITC always remains in focus on budget and increase in excise duty will pose further challenges to cigarette volume growth. Rural spending will help consumer stocks like Escorts, HUL, Dabur and Colgate. Raising tax brackets is likely to help discretionary spending.
Construction, Capital Goods & Cement: Railway spending is likely to rise further. Roads, infrastructure and real estate are likely to see some push. The key stocks to see the impact are: L&T, KEC International, Ahluwalia Contracts, NCC and UltraTech.
IT, Pharmaceuticals & Telecom: Though “Make in India” drive could help the Engineering R&D companies; the budget does not have any meaningful impact on IT and Telecom companies per se.
In Pharmaceuticals space, the government could increase tax exemption for preventive health check-ups, which will benefit the diagnostic companies/pathological laboratories. Healthcare will be a key focus area for the government.
Oil & Gas and Power: If the governments roll over the fuel subsidy shortfall of ~Rs 150 billion (Rs 15,000 crore) to FY20, then ONGC and Oil India may not witness subsidy pressure. In the power sector, rural electrification will continue to remain in focus. NTPC and Power Grid will be the key beneficiaries.
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