MARKET WRAP: Sensex tanks 395 pts as Budget 2019 fails to cheer investors

Topics MARKET WRAP

Domestic indices plummted on Friday as Modi government's Union Budget for 2019-20 failed to cheers investors. Even though the markets opened higher with the benchmark S&P BSE Sensex zooming past the 40,000 mark to hit 40,032, the index fell over 500 points from the highs. 

The S&P BSE Sensex closed 395 points, or 0.99 per cent, lower at 39,513 levels with the YES Bank, NTPC and Mahindra & Mahindra being the top laggards. The broader Nifty50 index tanked 136 points, or 1.14 levels, to end at 11,811 levels.

In the broader market, S&P BSE Mid-Cap ended 208 points, or 1.39 per cent, lower at 14,726 levels while the S&P BSE Small-Cap dipped 195 points, or 1.36 levels, to settle at 14,142 levels.

Sectorally, all the indices ended in the red except Nifty PSU bank and Nifty Bank index that gained after the finance minister announced that the government will pump in Rs 70,000 crore into public sector banks (PSBs) to strengthen them and enhance their lending capacity.

Metals, realty and auto counters were the biggest losers after the Budget proposed import duty hike for auto-parts, metals and other equipment used for manufacturing capital goods. Each index slipped over 3 per cent. PSU Bank index closed 0.18 per cent higher after gaining nearly 4 per cent intra-day on government's proposal to recapitalize banks.

GLOBAL MARKETS


Asian shares ended hugher in Friday. Japan's Nikkei closed 44 points or 0.2 per cent higher while South Korea's Kospi ended flat with a gain of 2 points or 0.09 per cent.

In the commodities market, Brent CrUde Futures were trading at $63.44 per barrel.

4:55 PM IST “While we still wait for all the specifics, with the inclusion of ETFs, retail investors now have another investment option to enjoy tax deductions under section 80c through long-term investments in CPSEs. While this definitely makes investing in government-owned enterprises more attractive, as before, the investor will still need to make sure to evaluate all available investment options before investing. With so many existing options covered under section 80C, it may not lead to significant flows in these ETFs either. Hopefully going forward, the government will support the retail investor by increasing the deduction limit under section 80C," says Gautam Kalia, Head – Investment Solutions, Sharekhan by BNP Paribas.

4:41 PM IST The 2019 budget had lots of expectation built up, this being the first budget of the new Government which had returned with a resounding mandate. Though the FM did not disappoint by continuing with the borrowing and deficit targets set in the interim budget to contain the fisc, the immediate steps needed to energize the economy were missing. The diversification of government borrowings with an increased share of sovereign external debt in external currencies was a welcome move. This move was cheered by the bond markets as this would in-turn help to reduce the crowding out of private borrowings and reduce the cost of funds for India Inc. There was not much relief for the middle-class in the budget. Additional cess of Rs. 1 on petrol & diesel acted as a dampener. However, focus on education, through the new education policy, and infrastructure development to elevate the living conditions across society. Overall, the budget ended up as just another event. I would rate it as 6 on a scale of 10.

4:39 PM IST The Government of India announced the full-fledged union budget for FY19–20 today (after the interim one before the elections). We believe the following announcements may have a negative impact on the IT sector: 1) increase in minimum public shareholding in listed companies to 35%, from 25% currently; and 2) proposal to levy a 20% tax on share buybacks. Only few IT companies have public shareholding of less than 35% – including TCS (promoter holding: 72%), Wipro (73.4%), and LTI,LTTS (75%) – and are accordingly ‘vulnerable’. While the proposed tax on share buybacks is negative prima facie, we reckon there is little scope for major market value erosion for companies under our coverage. Maintain ‘BUY’ on Infosys, HCL Tech and TechM, and ‘HOLD’ on ‘TCS’ and ‘Wipro’.

4:01 PM IST The index opened higher but was unable to manage around highs and showed strong profit-booking post budget and closed the week at 11,811 with gains of 0.19 per cent forming grave stone doji kind of candle pattern on weekly chart suggesting indecision in the markets. Now, the index has good support near 11,725-11,640 zone any break below 11,640 zone we may see more pressure, resistance for the index is coming near 11,900-11,890 zone. Nifty Bank closed the week at 31,476 zone with gains of 1.20 per cent and formed shooting star kind of candle pattern on weekly chart. The index has an immediate support near 31,300-31,100 zone and resistance is coming near 31,660-31,790 zone. 

3:53 PM IST

3:52 PM IST

3:37 PM IST The S&P BSE Sensex ended at 39,513, down 395 points while the broader Nifty50 index settled at 11,811, down 136 points.

3:23 PM IST Shares of information technology (IT) companies were under pressure with Tata Consultancy Services (TCS), Infosys, Wipro and HCL Technologies down nearly 5 per cent on the National Stock Exchange (NSE) on Friday in intra-day trade, after Finance Minister Nirmala Sitharaman proposed to extend the buyback tax at 20 percent to listed companies as well. At 02:33 pm, Nifty IT index was down 2.5 per cent, as compared to a 0.88 per cent decline in the benchmark Nifty 50 index. READ MORE

3:19 PM IST The budget in the overall scenario seems very balanced at this point in time. The increase in holding of up to 35% in listing companies is going to improve depth as well as make various listed companies available to retail participants. It will also attract foreign investment. Secondly, the additional 1.5 lakh exemption for homeowners on interest paid is a welcome move. This may have long term benefits for space as well as buyers and owners. We believe another good move that is seen in the budget is to focus on spending in infra and construction space. Opening up various routes for foreign investment and further easing the routes will bring in more long term investment in this space. The massive investment of 100 lakh crore for the next five years will boost the space and bring in more demand which has seen a slump in the last few months. With that, The rural boost of 1.95 cr houses is certainly going to improve demand for space like steel and aluminum, cement and its allied space. The reduction in tax for companies up to 400 cr is a welcome move but it could have been increased. We believe the only problem is with a 3.3% fiscal deficit number. In the current scenario with GDP projection at 7% it may see some variation. The PSU space is certainly a gainer with an increase in the limit to sectoral limit and a further 70k boost for PSU bank space will make select PSU banks a lucrative play.   

3:15 PM IST

3:14 PM IST -- NBFCs are important componenet of financial sector 

LIVE UPDATES

EXPERT COMMENT | Views on ETFs by Sharekhan by BNP Paribas

“While we still wait for all the specifics, with the inclusion of ETFs, retail investors now have another investment option to enjoy tax deductions under section 80c through long-term investments in CPSEs. While this definitely makes investing in government-owned enterprises more attractive, as before, the investor will still need to make sure to evaluate all available investment options before investing. With so many existing options covered under section 80C, it may not lead to significant flows in these ETFs either. Hopefully going forward, the government will support the retail investor by increasing the deduction limit under section 80C," says Gautam Kalia, Head – Investment Solutions, Sharekhan by BNP Paribas.

EXPERT COMMENT | Arun Thukral, MD & CEO, Axis Securities

The 2019 budget had lots of expectation built up, this being the first budget of the new Government which had returned with a resounding mandate. Though the FM did not disappoint by continuing with the borrowing and deficit targets set in the interim budget to contain the fisc, the immediate steps needed to energize the economy were missing. The diversification of government borrowings with an increased share of sovereign external debt in external currencies was a welcome move. This move was cheered by the bond markets as this would in-turn help to reduce the crowding out of private borrowings and reduce the cost of funds for India Inc. There was not much relief for the middle-class in the budget. Additional cess of Rs. 1 on petrol & diesel acted as a dampener. However, focus on education, through the new education policy, and infrastructure development to elevate the living conditions across society. Overall, the budget ended up as just another event. I would rate it as 6 on a scale of 10.

BUDGET REACTION | Views on IT sector by Edelweiss Securities

The Government of India announced the full-fledged union budget for FY19–20 today (after the interim one before the elections). We believe the following announcements may have a negative impact on the IT sector: 1) increase in minimum public shareholding in listed companies to 35%, from 25% currently; and 2) proposal to levy a 20% tax on share buybacks. Only few IT companies have public shareholding of less than 35% – including TCS (promoter holding: 72%), Wipro (73.4%), and LTI,LTTS (75%) – and are accordingly ‘vulnerable’. While the proposed tax on share buybacks is negative prima facie, we reckon there is little scope for major market value erosion for companies under our coverage. Maintain ‘BUY’ on Infosys, HCL Tech and TechM, and ‘HOLD’ on ‘TCS’ and ‘Wipro’.

MARKET COMMENT :: Rohit Singre, Senior Technical Analyst - LKP Securities

The index opened higher but was unable to manage around highs and showed strong profit-booking post budget and closed the week at 11,811 with gains of 0.19 per cent forming grave stone doji kind of candle pattern on weekly chart suggesting indecision in the markets. Now, the index has good support near 11,725-11,640 zone any break below 11,640 zone we may see more pressure, resistance for the index is coming near 11,900-11,890 zone. Nifty Bank closed the week at 31,476 zone with gains of 1.20 per cent and formed shooting star kind of candle pattern on weekly chart. The index has an immediate support near 31,300-31,100 zone and resistance is coming near 31,660-31,790 zone. 

Sectoral gainers and losers on NSE


Top gainers and losers on S&P BSE Sensex


Market at close

The S&P BSE Sensex ended at 39,513, down 395 points while the broader Nifty50 index settled at 11,811, down 136 points.

Nifty IT index dips 2% as govt proposes to extend buyback tax to listed cos

Shares of information technology (IT) companies were under pressure with Tata Consultancy Services (TCS), Infosys, Wipro and HCL Technologies down nearly 5 per cent on the National Stock Exchange (NSE) on Friday in intra-day trade, after Finance Minister Nirmala Sitharaman proposed to extend the buyback tax at 20 percent to listed companies as well. At 02:33 pm, Nifty IT index was down 2.5 per cent, as compared to a 0.88 per cent decline in the benchmark Nifty 50 index. READ MORE

BUDGET 2019 REACTION :: Mustafa Nadeem, CEO, Epic Research

The budget in the overall scenario seems very balanced at this point in time. The increase in holding of up to 35% in listing companies is going to improve depth as well as make various listed companies available to retail participants. It will also attract foreign investment. Secondly, the additional 1.5 lakh exemption for homeowners on interest paid is a welcome move.

This may have long term benefits for space as well as buyers and owners. We believe another good move that is seen in the budget is to focus on spending in infra and construction space. Opening up various routes for foreign investment and further easing the routes will bring in more long term investment in this space. The massive investment of 100 lakh crore for the next five years will boost the space and bring in more demand which has seen a slump in the last few months.

With that, The rural boost of 1.95 cr houses is certainly going to improve demand for space like steel and aluminum, cement and its allied space. The reduction in tax for companies up to 400 cr is a welcome move but it could have been increased. We believe the only problem is with a 3.3% fiscal deficit number. In the current scenario with GDP projection at 7% it may see some variation. The PSU space is certainly a gainer with an increase in the limit to sectoral limit and a further 70k boost for PSU bank space will make select PSU banks a lucrative play.   

Market check


BUDGET 2019 | Govt has a comprehensively thought-out solution for NBFCs: Nirmala Sitharaman

-- NBFCs are important componenet of financial sector 

EXPERT VIEW | Nikhil Kamath, Co-Founder & Chief Investment Officer, Zerodha

Union Budget 2019 was largely a non-event, especially from a financial markets perspective. The reforms we expected on STT did not come through. STT continues to remain the largest deterrent in price discovery, jobbers, and short term day traders make the markets deeper and significantly reduce impact costs. STT is a hindrance to this populous making it harder for them to thrive.
 
Personal income tax largely remained unchanged, an increase in the surcharge for those having an income of above five cr is par for the course. To discourage the practice of making business payments in cash, a 2% tax to be levied on cash withdrawal exceeding Rs 1 crore in a year from a bank account. This makes sense too and can be considered as positive.
 
Reduction in the corporate tax rate is also positive. All in all, it was a status quo budget where no seminal reforms came through.

BUDGET REACTION | Views on Banking Sector by ICRA

"The higher-than-expected capital support to the public sector banks in FY20 reiterates the GOI’s intent to bring them out of PCA and also provide with growth capital. The proposed high levels of GOI serviced bonds remains a dampner though the GOI’s intention to raise part of its borrowing programme and expectations of meeting the fiscal deficit targets should help cool the yields in the domestic market. An early implementation and clarity on the contours of the proposed partial credit enhancement by the GOI for pools bought by public sector banks from NBFCs would aid the liquidity flow to the currently beleaguered sector," says Karthik Srinivasan, Senior VP and Group Head - Financial Sector Ratings, ICRA. 

Market check | Nifty tests 11,800


BUDGET REACTION | Views on 2.5% hike in gold import duty by Reliance Securities

“The hike in import duties was unexpected, as market was expecting a reduction in import duties. While the golds prices have touched new highs with Gold MCX August 2019 futures contract scaling beyond Rs 35,000 per 10 gram, we see physical demand for gold coming down due to high prices. However prices of gold will continue to remain firm,” says Pritam Kumar Patnaik, Head Commodities, Reliance Commodities.

BUDGET REACTION | View on STT change by Sharekhan by BNP Paribas

“The STT change is a big relief to options traders as the STT (Securities transaction tax) charge will no more be made on the value of the contract but on the difference between the strike price and the market price only. For options that close in the money it would not force traders to square up in the last hour of trading as was the case earlier. Most traders would try squaring up to avoid the higher STT that made it expensive to hold onto a position that was in the money ahead of a expiry. Now the cost is not restrictive and once can allow it to expire in the money to lock in gains.”

Debt markets, FII & FPI norms: Key market-related proposals in Budget 2019

PSU Bank recap: Public Sector Banks (PSBs) proposed to be further provided 70,000 crore capital to boost credit. Government to initiate steps to empower accountholders to remedy the current situation in which they do not have control over deposit of cash by others in their accounts. Reforms will also be undertaken to strengthen governance.
 
Measures for NBFCs: For purchase of high-rated pooled assets of financially sound NBFCs, amounting to a total of Rupees 1-lakh crore, or Rs 1 trillion, during the current financial year, Government will provide one time six months' partial credit guarantee to Public Sector Banks for first loss of up to 10 per cent. Regulatory control of RBI over NBFCs to be strengthened. READ MORE


Industry comment :: Surendra Hiranandani, founder & director, House of Hiranandani

India's real estate sector has a reason to cheer as Finance Minister has announced a range of sops for real estate developers as well as homebuyers in the Budget. These measures are expected to boost housing sector as well as investor sentiments in the near future and will provide ample opportunities for the home buyers to invest. On many fronts, this is a favorable and bold budget for the real estate industry.

A massive boost for infrastructure will not only benefit the realty sector but also help other industries and create large scale employment in the economy. The government’s focus on infrastructure development of tier 2 and 3 cities will surely make these cities ready for next round of urbanization

BUDGET IMPACT | Jewellery stocks fall as govt hikes custom duty on Gold

COMPANY LATEST PREV CLOSE OPEN HIGH LOW CHG(RS) CHG(%) MKT-CAP
(RS CR)
TITAN COMPANY 1286.00 1290.65 1289.75 1299.90 1250.55 -4.65 -0.36 114171.08
RAJESH EXPORTS 728.95 720.00 724.90 728.95 719.00 8.95 1.24 21525.89
VAIBHAV GLOBAL 855.60 860.00 865.00 865.00 853.75 -4.40 -0.51 2808.08
PC JEWELLER 40.80 42.45 42.45 43.00 40.35 -1.65 -3.89 1610.17
RENAISS. GLOBAL 266.70 272.00 266.70 266.70 266.70 -5.30 -1.95 503.53

(Click here to view the full list)

NEWS ALERT | Nirmala Sitharaman says FY21 & FY22 fiscal deficit target retained at 3%

BUDGET IMPACT | Shares of Infra cos fall as Budget indicates no major infra spend


PSU banks gain on government Rs 70,000 crore capital infusion plans

Newly-appointed Finance Minister Nirmala Sitharaman, proposed in her maiden budget speech that the public sector lenders would be provided budgetary support of Rs 70,000 crore for recapitalisation. Analysts expected capital infusion in the range of Rs 35,000-40,000 crore. READ MORE

NEWS ALERT | Budget 2019 earmarks Rs 83,000 cr for highways

-- Allocation stands at Rs 83,015.9 cr vs Rs 78,625.50 cr in FY19


NEWS ALERT | Allocation towards Railways at Rs 68,019 crore for FY20

-- Allocation was Rs 55,135 crore in FY19

NEWS ALERT | Skill development grant for MSMEs increased from Rs 229 cr to Rs 480 cr

NEWS ALERT | Budget 2019 allocates Rs 7,000 crore for MSMEs in FY20

-- Allocation up 6.9 per cent.

-- Allocation was Rs 6,552.61 in FY19

-- Khadi grant reduced from Rs 413.12 cr to Rs 308.5 crore


Budget 2019: Govt to sell first global bond to fund infra and spur growth

Government plans to narrow its budget deficit target and sell its first global bond to raise funding for infrastructure spending to spur economic growth. Bonds rallied. The fiscal deficit goal for the year that began on April 1 was lowered to 3.3% of gross domestic product from 3.4% set in February’s interim plan, Finance Minister Nirmala Sitharaman said in her maiden budget in Parliament in New Delhi on Friday. That plan will in part be funded by increasing taxes on the wealthy and selling stakes in state-run companies. READ MORE
Finance Minister Nirmala Sitharaman with MoS Anurag Thakur and others leave the North Block to present the Budget for 2019-20 at the Parliament | Photo: PTI

NEWS ALERT | Ministry of Jal Shakti allocated Rs 8,245 crore

-- Ministry includes Department of Water Resources, River Development and Ganga Rejuvenation

-- Allocation was Rs 7,612.52 in FY19

-- Allocation to Clean Ganga at Rs 750 crore, same as FY19

Govt's income and expenditure sources


NEWS ALERT | Budgetary support to FAME scheme pegged at Rs 500 crore for FY20

-- Allocation was Rs 145 crore in FY19

-- FAME: Faster Adoption and Manufacturing of Electric Vehicles scheme

NEWS ALERT | Allocation to defence in Budget 2019 at Rs 13,635.15 crore

-- Allocation was Rs 16,318.48 crore

-- Allocation down 16.44%

NEWS ALERT | Allocation to Commerce Ministry increased to Rs 6,219.32 cr in FY20

-- Allocation in FY19 was Rs 6195.30

L&T Finance Holdings climbs over 4%


NEWS ALERT | Amount towards regional connectivity scheme (UDAN) at Rs 480 crore for FY18

-- UDAN stands for Ude Desh ka Aam Nagrik scheme

-- Amount was Rs 441 crore in FY19

OMCs trade lower on govt's plan to levy special additional excise duty of Rs 1/litre on petrol & diesel


NEWS ALERT | Transfer to Air India's divestment SPV at Rs 2,600 crore

-- Amount up 50%

-- Transfer to Air India Asset Holding Co was Rs 1,300 crore in FY19

NEWS ALERT | Allocation to Civil Aviation ministry at Rs 4,500 crore for FY20

-- Allocation down by 53.6 per cent

-- Allocation in FY19 was Rs 9,700 crore

ITC dips on govt's plan to impose basic excise duty on tobacco


EXPERT VIEW | VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services

  • The highlight of the Budget is the higher tax on the super rich. From the perspective of resource mobilisation and social justice this cannot be faulted. But it has to be acknowledged that the tax incidence rising to 42 per cent on the super rich is very sharp.
  • The abolition of angel tax and interchangeability of PAN and Aadhar and ‘faceless assessment’ of tax assessment are positives.
  • The fiscal deficit target of 3.3 per cent is unlikely to be achieved.
  • The disinvestment target of 1.05 lakh crores is achievable and has to be strongly pursued. The proposal to raise public stake in listed companies is desirable but will face practical constraints in implementation in the case of some large-cap companies.
  • The crash in bond yields to around 6.66 per cent is the direct consequence of the proposal to think about raising sovereign debt from abroad. 
  • The design and focus of the Budget is in keeping with the focus of the Economic Survey. Follow up policy initiatives based on the thinking of Economic Survey can be expected, going forward.  

NEWS ALERT | Budget 2019 rises allocation to agriculture sector to Rs 1.3 lakh crore, up 92.45%

 -- Allocation in FY19 was Rs 67,800 crore

-- Allocation in FY20 at Rs 1,30,485.21 crore

-- Allocation for  Agriculture, Cooperation and Farmers' Welfare 

EXPERT VIEW | Impact of Gold import duty increase by Geojit Financial Services

"Spot gold in the international market held steady near $1415 an ounce as investors stay away from taking fresh bets ahead of the key U.S employment data scheduled later in the day. There are expectations that the job data would offer more cues on U.S Fed’s stance on interest rate cut. Anyhow, prices are on track for a seventh consecutive weekly gain with prices gained more than two percent during this week. At the same time, domestic gold futures rallied by more than two percent due to an increase in custom duty on gold and precious metals in the Union Budget. Today, in the Union Budget, Finance Minister has proposed a hike of customs duty on gold to 12.5 percent from an existing 10 percent," says Hareesh V, Head - Commodity Research at Geojit Financial Services.

TCS, Wipro, D-Mart: Shareholding norm rejig to impact 1,174 companies

Finance minister has asked SEBI to consider to reduce maximum promoter shareholding from current level of 75 per cent to 65 per cent. Meaning thereby, minimum public shareholding for listed companies has to be increased from current level of 25 per cent to 35 per cent. Based on the latest shareholding data available, our research shows 1,174 listed companies have promoter shareholding above 65 per cent. In other words, 25 per cent of the entire universe of listed companies (around 4,700 companies) will have to go through off-loading promoter stakes to meet this requirement. READ MORE
Illustration: Ajay Mohanty

Nifty sectoral indices at this hour


Sensex extends fall to over 400 pts


Market check | Sensex crashes 300 pts


NEWS ALERT | Net borrowing target at Rs 4.73 lakh crore for FY20

-- Gross borrowing target at Rs 7.1 lakh cr 
 
-- Short term borrowing target at Rs 25,000 cr

NEWS ALERT | Aim to get Rs 57, 480 crore from PSU Cos' dividends in FY20

 
 

NEWS ALERT | Net tax revenue target set at Rs 16.49 lakh cr for FY20



Market check | Nifty dips nearly 100 pts


Market check | Sensex slips over 200 pts


EXPERT VIEW | Jagannadham Thunuguntla, Sr. VP & Head of Research (Wealth), Centrum Broking

In Union Budget, finance minister has asked SEBI to consider to reduce maximum promoter shareholding from current level of 75% to 65%. Meaning thereby, minimum public shareholding for listed companies has to be increased from current level of 25% to 35%. Based on the latest shareholding data available, our research shows 1,174 listed companies have promoter shareholding above 65%. To put in other words, 25% of the entire universe of listed companies (~4,700 companies) will have to go through off-loading promoter stakes to meet this requirement. At the current market prices, the total quantum of sale that needs to be done by these 1,174 companies works out to about whopping amount of Rs.3,87,000 crores. 

Below is a list of companies with requirement of largest quantum of sale

Stock Market Capitalization (in Rs. Cr) Promoter holding (%)* Need to off-load (%) Quantum of sale (in Rs. Cr)
Tata Consultancy Ser.. 840450 72.1 7.1 59672
Wipro Ltd. 170099 73.9 8.9 15139
Avenue Supermarts Ltd. 88491 81.2 16.2 14336
Bandhan Bank Ltd. 66312 82.3 17.3 11472
HDFC Life Insurance .. 98166 76.1 11.1 10896
 

NEWS ALERT | Import of defence equipment will be exempt from basic custom duty: FM Sitharaman

-- Defence equipment not being manufactured in India

NEWS ALERT | No charges or merchant discount rates will be imposed on customers or merchants for Business establishments with annual turnover of Rs 50 crore

-- BHIM, UPI, Aadhaar Pay, NEFT, RTGS can be used to promote less cash economy. Business establishments with annual turnover of Rs 50 crore will have to use these modes of payments with no charges or merchant discount rates will be imposed on customers or merchants. RBI and banks will absorb these costs, FM Sitharaman says

NEWS ALERT | New coins of Re 1,2,5,10,20 to be made available to public soon

NEWS ALERT | Propose to levy TDS of 2% on cash withdrawal exceeding Rs 1 cr in a yr from 1 bank a/c: FM Sitharaman

Alert: TDS is tax deducted at source

NEWS ALERT | Proposal for additional deduction of Rs 1,50,000 on interest on loans borrowed under affordable housing

-- Subject to property value of Rs 45 lakh

Housing Finance stocks gain as FM says regulatory power will be transferred from NHB to RBI

COMPANY LATEST PREV CLOSE GAIN(rs) GAIN(%)
GIC HOUSING FIN 268.55 255.95 12.60 4.92
PNB HOUSING 799.00 779.75 19.25 2.47
CAN FIN HOMES 365.65 358.15 7.50 2.09
INDIA HOME 66.65 65.45 1.20 1.83
LIC HOUSING FIN. 577.90 568.50 9.40 1.65
INDIABULLS HOUS. 712.60 703.95 8.65 1.23
RELIANCE HOME 13.87 13.75 0.12 0.87
AAVAS FINANCIERS 1518.30 1506.85 11.45 0.76
H U D C O 42.35 42.15 0.20 0.47
REPCO HOME FIN 374.85 373.30 1.55 0.42

MARKET CHECK | S&P BSE Industrials index flat; Sadbhav Engg dips nearly 7%


BUDGET COMMENT :: Amar Ambani of YES Securities

"As expected, capital infusion in public sector banks has come through. Infusion of Rs 70,000 crore is a positive for PSU Banks"

Nifty PSU Bank index rises after allocation of Rs 70,000 cr as capital boost


EXPERT VIEW | Pranay Bhatia, Partner, BDO India

Measures announced by the FM for water management would go a long way in an area that requires an urgent fix. The mission of Har Ghar Jal by 2024 is laudatory 

EXPERT VIEW | Milind Kothari, Managing Partner, BDO India

The proposal to let FIIs and FPIs to invest in debt securities issued by NBFC, would provide a much needed boost of capital to a sector now starving of capital; an important prop to several sectors, particularly, real estate and automobile which are reeling for lack of finance to purchasers/buyers.

FM Sitharaman on PMAY (Urban)

NEWS ALERT | To consider issuing Aadhaar card for NRIs with Indian passports

-- This would be without considering 180 days stay 

BUDGET COMMENT :: Milind Kothari, Managing Partner, BDO India, Partner & Head, Tax & Regulatory Services

"The proposal to let FIIs and FPIs to invest in debt securities issued by NBFC, would provide a much needed boost of capital to a sector now starving of capital; an important prop to several sectors, particularly, real estate and automobile which are reeling for lack of finance to purchasers/buyers"

Suraj Malik, Partner/ Transaction Tax, BDO India on Budget 2019

-- Apart from the sustained thrust on infrastructure, the reforms announced for sectors such as insurance and capital markets will immensely boost investments and the financial sector in India 

FM on investment in agricultural infrastructure

Nifty IT index extends losses


MARKET CHECK| Most auto stocks trade lower


MARKET UPDATE | Power stocks slip over 1%; NTPC drops nearly 2.50%


MARKET CHECK | Realty stocks slip in the trade


Market check | Sensex dips 100 points


BUDGET IMPACT :: Proposal to allow 100% FDI insurance intermediaries

COMPANY LATEST PREV CLOSE GAIN() GAIN(%) VOLUME
NEW INDIA ASSURA 155.80 148.10 7.70 5.20 58733
GIC HOUSING FIN 267.25 255.95 11.30 4.41 53365
S C I 33.60 32.25 1.35 4.19 164817
GENERAL INSURANCE 238.05 229.70 8.35 3.64 73130
GODREJ AGROVET 514.40 499.05 15.35 3.08 5753

NEWS ALERT | Will replicate zero-budget farming: Sitharaman

-- FM talks of replicating zero-budget farming, says concept will help double farm incomes by 2022.

NEWS ALERT | New Space India Limited (NSIL) has been incorporated to tap the benefits of Isro

-- A PSU to harness India's space ability commercially

Nifty sectoral indices at this hour


Market check


Market check


NEWS ALERT | Propose to set up social-stock exchange to list social enterprises and voluntary organisation under SEBI

--- Organisations for social welfare

MARKET CHECK | IRB Infra surges nearly 2%


Market check | Sensex rises as FM Nirmala Sitharaman presents Budget 2019


Market check ahead of Budget 2019

-- Sensex trading at 39,928 levels, up 20 points or 0.05 per cent

-- Nifty trading at 11,942 levels, down 4 points or 0.04 per cent

GIC Housing Fin zooms nearly 8% ahead of Budget 2019


Housing Development and Infrastructure Limited rises 10% ahead of Budget 2019


Jain Irrigation gains ahead of Budget 2019


10 key things brokerages expect from first Budget under Modi 2.0

All eyes are set on the first Union Budget under Modi 2.0 that is slated to be unveiled on Friday (July 5). With a clear evidence of economic slowdown and weak corporate earnings, Finance Minister Nirmala Sitharaman has her task cut out. Deep agrarian distress, high unemployment rates, the slowdown in automobiles and consumer demand, crisis in NBFC (non-banking financial company) sector and rising pressures in real estate and housing and muted capex cycle in the economy are some of the pressing issues that need addressal. READ MORE


IIFL Securities' Abhimanyu Sofat on Budget 2019

Essel group's plan to acquire 62% stake in LKP Finance dealt a blow

Essel group’s plan to acquire 62 per cent stake in LKP Finance has been dealt a blow following the change in liquidity position, said people in the know. They said that Essel has made payment for the 24 per cent it acquired during the open offer, but has not been able to pick up the promoters' stake in LKP Finance.
 
The people added that Essel group may consider offloading its 24 per cent stake if the current promoters are able to find another investor to take over the company. READ MORE

NEWS ALERT | Union Cabinet meeting begins in Parliament

NTPC down over 2%


Market check | Nifty slips below 11,950


Market check | Sensex trades in the red


Working on EV projects; need realistic roadmap, says Hero MotoCorp

The country’s largest two wheeler maker Hero MotoCorp is working on several electric vehicle projects even as it has asked the government for a more cautious, clear and realistic roadmap towards the adoption of such technology in the country.
 
In a message to shareholders, Hero MotoCorp Chairman Pawan Munjal said in the company's Annual Report for 2018-19 that the company is fully geared up for the EV challenge. READ MORE
Hero MotoCorp Chairman Pawan Munjal

Market check | Nifty erases early gains


Elara Capital on Sobha

Sobha
 
Rating: BUY
 
Target Price : Rs 672
 
Upside : 20%
 
CMP : Rs 561

The implementation of RERA is aiding in sales for organized developers. Sobha’s pre-sales run-rate and cash collections have been steady for several quarters, and they are expected to pick up, aided by new launches and resilient demand in markets where the company operates. Its strong brand presence in the market, execution track record and sales momentum provide comfort on sustainable growth. We reiterate Buy with a revised TP of INR 672 from INR 600 based on a one-year forward NAV (unchanged). Faster monetization of its legacy landbank would be a key thing to monitor.
 
‚Äč
 

Budget 2019 | Spending would be towards sectors such as pipes, EPC, water treatment: JM Financial

Water is getting high attention from policy makers, media, and increasingly so from the markets given the rising concern on future availability as well as the deterioration in drinking water quality. The government is planning an aggressive target of providing piped water to all households by 2024, up from c.18% at present. This indeed is a massive challenge given the sheer numbers involved – c.150mn households across 0.5mn+ villages need to be brought under the scheme over the next five years. At an aggregate level, there is water available for the expansion of piped water scheme, but there is wide regional disparity with high stress in north-west and south India. The successful expansion of sanitation coverage from 39% in FY14 to 99% in FY19 through the Swachh Bharat Abhiyaan (SBA) makes us optimistic on the take up of piped water scheme by the same administration. Based on our estimates, reaching 150mn households could mean a doubling of spending on water related infrastructure creation over the next 5 years as compared to FY15-19. In our view, the spending would be towards sectors such as pipes, EPC, water treatment, pumps & valves, cement, among others.

Market check | Sensex turns flat ahead of Budget 2019 presentation


BUDGET 2019 | Govt must ensure predictable policy for India Inc: Eco Survey

With private companies reluctant to invest in fresh capacity, the Economic Survey has suggested apart from reducing interest rates and encouraging savings, the government must ensure predictable policy for India Inc.
 
“Investment, especially private investment, is the ‘key driver’ that drives demand, creates capacity, increases labour productivity, introduces new technology, allows creative destruction and generates jobs,” the Survey said. READ MORE

OMCs trade higher

COMPANY LATEST PREV CLOSE GAIN(rs) GAIN(%) VOLUME
INDRAPRASTHA GAS 304.70 302.40 2.30 0.76 7365
RELIANCE INDS. 1287.55 1283.00 4.55 0.35 32254
PETRONET LNG 253.30 252.50 0.80 0.32 21203
CASTROL INDIA 132.40 132.05 0.35 0.27 4815

Vedanta dips 1.5%


ONGC dips over 2%


BUDGET 2019 | Where Sitharaman can find a cool $1 trn for infra investment

India will need $1 trillion of infrastructure investment to nudge annual GDP growth higher by just half a percentage point in Prime Minister Narendra Modi’s second five-year term. Of this, at least 55% will have to come from public resources. Where’s the money?
 
Those figures from an analysis by the Confederation of Indian Industry are the No. 1 challenge for Nirmala Sitharaman as the country’s new finance minister gets ready to present her first annual budget on Friday. READ MORE

MARKET CHECK


Realty stocks gain

COMPANY LATEST PREV CLOSE GAIN(rs) GAIN(%) VOLUME
SOBHA 569.30 560.15 9.15 1.63 8371
OBEROI REALTY 632.00 623.70 8.30 1.33 6075
SUNTECK REALTY 481.95 476.65 5.30 1.11 17908
DILIP BUILDCON 488.35 484.50 3.85 0.79 7361
GODREJ PROPERT. 953.10 945.95 7.15 0.76 18140
OMAXE 200.70 199.50 1.20 0.60 6016
NBCC 61.60 61.30 0.30 0.49 57804
DLF 194.95 194.50 0.45 0.23 70655
PHOENIX MILLS 653.65 652.60 1.05 0.16 1

Market check | Sensex slips below 40k


Divis Labs dips 2%


Technical calls by Nirmal Bang Securities


Stock Name Reco Entry price Targets Stop Loss Duration Status
(Buy/Sell)
KOTAKBANK BUY 1496.4 1540 1472 BTST OPEN
COLPAL BUY 1158.7 1190 1145 BTST OPEN
PIDILITIND BUY 1231 1270 1210 BTST OPEN
GSFC BUY 93.4 102 90 1-2DAYS OPEN

GM Breweries hits 52-week low on weak June quarter earnings

Shares of GM Breweries hit a 52-week low of Rs 455, down 8 per cent, in Friday's early morning trade on the National Stock Exchange (NSE), after the company reported a 27 per cent decline in net profit at Rs 16 crore in the first quarter of fiscal 2019-20 (FY20), due to higher raw material cost. The company engaged in breweries & distilleries had posted a profit of Rs 22 crore in June 2018 quarter. READ MORE

Nifty PSU Bank index pares early gains


Eco Survey calls for simpler minimum wage system to boost inclusive growth

A simple and effective minimum wage system is an ‘urgent necessity’ for India’s inclusive growth, according to the Economic Survey of 2018-19.
 
“A well-designed minimum wage system can be a potent tool for protecting workers and alleviating poverty, if set at an appropriate level that ensures compliance. International experience has shown that relatively simple systems are more effective and usually complex systems are least effective,” the survey said. READ MORE

Most active stocks by volume

COMPANY PRICE(rs) CHG(rs) CHG(%) VOLUME
WESTLIFE DEVELOP 310.50 4.30 1.40 3024375
REL. COMM. 1.59 0.07 4.61 1995427
YES BANK 94.60 -1.65 -1.71 1113819
RELIANCE POWER 4.36 0.06 1.40 417426
VODAFONE IDEA 12.47 0.14 1.14 365380
» More on Most Active Volume

BUDGET 2019 | Index and labels: How Economic Survey plans to bring certainty in policy

The Economic Survey 2018-19 made a case for reducing what it calls ‘economic policy uncertainty’ in India, by making policy and rules more predictable and stable, properly documenting the implementation of policy, and following an ‘economic policy uncertainty index’.
 
However, the above-mentioned index seems somewhat problematic. “While economic uncertainty stemming from uncontrollable factors remains beyond the control of policymakers, they can control economic policy uncertainty. READ MORE

YES Bank slips 3%, hits fresh five-year low


Technical Outlook by ICICI Securities

  • The price action formed a small bodied bull candle carrying a higher high-low, indicating range bound activity amid positive bias ahead of Union Budget; 
  • We believe the Nifty has undergone healthy consolidation by oscillating in the broader range of 12000-11600 post exit poll session, helping the index to form a strong base at 11600. This makes us confident of believing the stage has been set for the Nifty to resolve out of upper band of consolidation (12000) and head towards our earmarked target 12400 in coming weeks;
  • Therefore, a dip towards 11850-11800 should be used as incremental buying opportunity in quality midcaps on the onset of quarterly result season Q1FY20;
  • In the coming session, volatility would remain elevated owing to the Union Budget. However, despite such elevated volatility, we do not foresee the Nifty sustaining below current week’s low (11815). Rather, we expect the Nifty to surpass the psychological mark of 12000 and accelerate upward momentum.

Pharma stocks trade higher

COMPANY NAME LATEST HIGH LOW CHG
(rs)
CHG(%)
EARUM PHARMACEU. 36.00 36.00 36.00 -0.05 -0.14
HIKAL 175.10 176.00 174.30 0.65 0.37
BIOCON 249.35 250.20 247.40 0.75 0.30
SUN PHARMA.INDS. 394.05 394.30 392.30 1.95 0.50
PIRAMAL ENTERP. 1982.00 1983.85 1954.00 35.35 1.82
AUROBINDO PHARMA 609.80 610.60 603.00 5.10 0.84
STRIDES PHARMA 394.05 396.00 393.50 0.50 0.13
SYNCOM FORMUL. 0.89 0.90 0.88 0.00 0.00
LUPIN 761.40 762.00 756.20 7.60 1.01
NUTRAPLUS INDIA 7.49 7.68 7.40 0.17 2.32

Agarwal Industrial Corp zooms 5%

-- CARE for the first time assigned to the company 'BBB' rating for bank facilities (short term) for an aggregate amount of Rs 100 crore


Rain Industries up 3%

-- India Ratings revised outlook to ‘stable' from 'positive'.

GMR Infra gains 3% in trade

 -- Group sold entire stake of 47.62 percent in GMR Chhattisgarh Energy to Adani Power.


Mcleod Russel India slips over 4%


HDFC Life Insurance Co gains over 1%


PSU bank recap, growth revival, fiscal prudence: Expectations from Budget

Given the slowdown in the economy and the possibility of oil prices moving north over the next few months on the back of likely supply cuts by Organization of the Petroleum Exporting Countries (OPEC), market experts expect the upcoming Union Budget to focus on reviving growth and yet maintain fiscal prudence.
 
That apart, re-capitalisation of banks is also a key monitorable. The government, they say, is likely to continue with the off-budget route for carrying out infra-related spending READ MORE HERE


Quess Corp soars 5% in early trade


Maruti Suzuki trading flat despite Competition Commission of India ordering probe against company


BUDGET EXPECTATION :: Prabhudas Lilladher

There could be a thrust on improving drinking water availability and river linking. We expect the imposition of tax on buyback of shares and tax relief to the middle class under basic tax exemption or higher limit in 80CC. Tax-free bonds may be reintroduced to fund long-term infrastructure projects. Scrappage policy for commercial vehicles and incentives for creating EV charging infrastructure.
 

BUDGET EXPECTATION :: Anand Rathi Financial Services

Expect the Budget to positively impact the equity market, especially FMCG, small durables, two-wheelers, real estate and infra, road and railway-related companies. There could be a one-off increase in fiscal deficit to Rs 8 trillion or 3.8 per cent of GDP - an increase of Rs 1 trillion over the FY20 interim Budget target.

EXCLUSIVE :: Unrealistic to expect any major boost from the Budget itself: Pratik Gupta

As the markets await the government to spell out proposals in the upcoming Budget on Friday, PRATIK GUPTA, managing director and head of equities at Deutsche Bank India tells Puneet Wadhwa that given a likely US Federal Reserve (US Fed) rate cut cycle going forward, he expects inflows to emerging markets – including India – to pick up over the next six months READ MORE

BUDGET EXPECTATION :: Shubhada Rao, chief economist, YES Bank

As such, the FY20 Budget arithmetic will need to be based on substantial tax revenue shortfall in FY19 provisional numbers, but more importantly, it has to find resources to finance the farmer income support scheme (which since then has been expanded) along with a new pension scheme while living up to the relief promised to small taxpayers in the Interim Budget. All this, in an economy that is losing growth momentum, brings the tightrope walk of balancing growth with fiscal prudence to the fore.
 
We are of the opinion that the Government will prune its tax revenue projections vis-à-vis Interim Budget; bank on a possible spectrum auction windfall and a higher disinvestment target of INR 1000 bn on the non-tax front. But to retain its Interim Budget fiscal deficit target of 3.4% of GDP, expenditure curtailment will be necessary. As such, deferment of part food subsidy payment owed to FCI yet again will allow the Government to direct its spending where it is needed the most – i.e. to support a swifter cyclical recovery in consumption

 

BUDGET EXPECTATION :: Edelweiss Securities

The focus could shift to the rural/social sector. Income support scheme is already underway and ramp up in affordable housing may also be needed to give a fillip to the beleaguered real estate sector, the brokerage says. We do not expect material changes on the tax front.
 

MARKET ALERT | Sensex holding 40k for the first time since June 11

BUDGET EXPECTATION :: HDFC Securities

We expect the government to fund its election promises and maintain policy continuity (focus on agriculture, rural development, infra spending). Though there is a clamor for fiscal expansion given the current trying circumstances (like in FY02 and FY09), reflation need to be done in a measured way and reforms have to be taken forward. Given the rising populism across the globe, it would be prudent not to pander to short-term needs in a way that the medium-term structure of the economy is damaged.

MARKET COMMENT :: Chris Wood of Jefferies

Donald Trump announced in his post-G20 press conference, as expected, a resumption of negotiations on US-China trade and a decision to delay the next increase in tariffs. But the announcement on Huawei was a positive surprise even though the critical details were lacking. Anyone short the obvious American tech stocks suffering from the Huawei ban would have had no choice but to cover the position

GREED & fear is less confident than before that a trade deal will be done since, unlike earlier this year, the interminable US presidential election season has now begun. This means Trump will have to defend any deal with Beijing against Democrat criticism. It also remains the case that the Fed, via its dovish language of late, has enabled Trump’s hardline on trade

(Source: Wood's weekly newsletter to investors, GREED & fear)

Chris Wood

Motherson Sumi slips 1% in early trade


Broader markets under-performing benchmark indices ahead of Budget 2019


DLF trading flat

-- Company fixed July 23 as record date for determining entitlement of shareholders for dividend for FY19.

Eveready Industries gains 2% in early trade

-- Yes Bank acquired 9.47 percent stake in company.


BUDGET EXPECTATION :: Motilal Oswal Financial Services

The government needs to ensure that private investments pick up as that would be a key driver for long-term economic growth. Some of the other key factors to look out for in the Budget would be the investment plans for job creation, increasing tax compliance, simplification of GST, attracting foreign investments, divestment plans and recapitalisation of banks.

BUDGET EXPECTATION :: ICICI Securities

The key focus area for government in this budget would be alleviating the ‘agricultural and rural stress, infrastructure development and spur-up consumption while the government would also likely lay-out five-year roadmap for economy and policy framework. The government is likely to maintain the disinvestment target of Rs 90,000 crore as set in the interim budget. Post budget, a positive surprise may flow from the tapping excess reserves from RBI which government could potentially derive to the tune of Rs 2.4 trillion

Sobha gains in early trade


Sectoral trends on NSE at this hour


Top gainers and losers on S&P BSE Sensex


Market at open


Market at open


NEWS ALERT | Issam Bachaalani resigns as MD and CEO of Colgate w.e.f Aug 1

-- Bachalaani to be succeeded by Ram Raghavan 

BUDGET 2019 | Economic Survey 2019: Good suggestions on jobs, says expert

The Economic Survey has identified investments and in particular, private investments, as the key driver to do many things — drive demand growth, create capacity, increase labour productivity, introduce new technology, allow creative destruction, and create jobs. It does not seem to worry that introducing new technology and labour productivity can make it difficult to create jobs on a net basis. So, it may not be possible to meet all objectives equally. READ MORE

BUDGET 2019 | Finance Minister Nirmala Sitharaman with Fin Min officials and Budget team

BUDGET 2019 | Economic Survey eyes a virtuous self-sustaining growth cycle, says expert

The annual Economic Survey of the finance ministry, while projecting a shallow recovery in the current fiscal year, has set the policy path for increasing the size of the economy to $5 trillion by March 2025. In that endeavour, the Survey targets a real growth rate of 8 per cent, which, along with 4 per cent inflation, or 12 per cent growth in nominal terms, would allow for reaching the target set by the government. READ MORE

Top gainers and losers on S&P BSE Sensex during Pre-open trade


Rupee opening

Rupee opens lower at 68.55/$ vs Thursday's close of 68.49 against the US dollar

Market at pre-open


Market at pre-open


BUDGET 2019 | Govt my enhance start-up fund to Rs 20,000 cr in Budget 2019: Sources

The Start-up India programme had created the 'Fund of Funds for Startups (FFS)' with a corpus of Rs 10,000 crore to provide support for Start-ups, over a period of XIV and XV Finance commission cycles.
 
The Fund was set up with the approval of Union Cabinet in June 2016 and is managed by Small Industries Bank of India (SIDBI) and contributes to the corpus of Alternate Investment funds (AIFs) for investing in equity and equity linked instruments of various start-ups. READ MORE


NEWS ALERT | Finance Minister Nirmala Sitharaman reaches North Block

BUDGET 2019 | Economic Survey bats for a 'rationalised' tax regime to boost start-ups

The policy document, which was tabled in Parliament on Thursday, said the “outlook of the Indian economy appears bright with prospects of a pick-up in growth in 2019-20 on back of the pick up in private investment and robust consumption growth". It said the government is playing a proactive role in investment promotion through a liberal foreign direct investment (FDI) policy.

During 2018-19, total FDI equity inflow stood at $44.36 billion as compared to $44.85 billion during 2017-18. According to government data, start-ups raised $7.5 billion in 2018, a majority of which was foreign capital, an increase of 74 per cent over the previous year. India now has 10 unicorn start-ups, collectively valued at over $35 billion, it said. READ MORE

BUDGET 2019 | NBFC stress poses contagion risks to growth, says Economic Survey

The Economic Survey for 2018-19 highlighted contagion risks posed by stress in non-banking financial companies (NBFCs). It has hurt consumption growth in the automobile sector affecting manufacturing, the Survey said.
 
It warned that if the impact of the stress in the NBFC sector spilled over this year, it might lead to lower credit offtake from NBFCs, which might impede consumption spending growth. The Survey charted the origin of the NBFC crisis to mutual funds' (MFs') risk aversion after the IL&FS crisis in September. READ MORE

Edelweiss Professional Investor Research on Budget 2019

Union Budget may see fiscal deficit at ~3.4% thus putting all the revival work on monetary policy. We argue that this is an appropriate time for fiscal nudge as monetary conditions remains favourable. Extra revenue from RBI or IEBR could help in improving the quality of fiscal spending
 
MARKET IMPACT
 
-- Stock markets may perceive sticky total expenditure as positive if government is able to highlight more sources of revenue either through RBI or a slight fiscal nudge
 
-- Adherence to 3.4 per cent fiscal deficit target may have a softening impact on bond yields but equity markets may consolidate for some time
 
-- An easier fiscal policy may cause a reaction in bond yields but we expect such moves to be transitory since the inflation trajectory remains well under control

BUDGET 2019 | 'Indian' agenda for Modi 2.0: Eco Survey projects 7% GDP growth in 2019-20

In the first Economic Survey of Prime Minister Narendra Modi’s second term, new Chief Economic Advisor K V Subramanian constructed a growth template for India that he claimed was a “departure” from “traditional Anglo-Saxon thinking”. The Survey argued that economies were rarely in “equilibrium” but rather in either a vicious or a virtuous cycle, and went on to make the case for investment as the key driver of job creation, exports, demand, and economic growth. READ MORE

ECONOMIC SURVEY 2019: A much-needed blueprint

Over the last few years, particularly during the tenure of the previous Chief Economic Adviser (CEA) Arvind Subramanian, the Economic Survey (ES) morphed from an exhaustive — and often tedious— account of the economy’s performance over the previous year into a more analytical and forward looking policy statement.
 
For one thing, it attempted to join the dots and draw the proverbial “big picture” pertaining to some of the critical contemporary economic issues. READ MORE

Financial creditors recover more under IBC, says Economic Survey

The Economic Survey said while the sustainable impact of the Insolvency and Bankruptcy Code (IBC) would be known in due course, green shoots had already emerged and some significant benefits of the IBC were visible. “The threat of promoters losing control of the company or protracted legal proceedings is forcing many corporate defaulters to pay off their debt even before insolvency can be started,” it said. READ MORE

Divestment to make up for tax-revenue shortfall this year: CEA Subramanian

Just a day before the Union Budget 2019-20, Chief Economic Advisor Krishnamurthy Subramanian said asset monetisation and disinvestment were expected to make up for the expected shortfall in revenue. Subramanian, after presenting the Economic Survey 2018-19, told Arup Roychoudhury and Somesh Jha the topics not covered in the Survey, like banking sector reforms, would find place in the next Economic Survey seven months from now. READ MORE
CEA Krishnamurthy Subramanian

BUDGET 2019 | PSU bank recap, growth revival, fiscal prudence: Expectations from Budget

“We believe that the government will focus on maintaining continuity in policy and spending on schemes allocated per the interim budget. As such, we maintain our fiscal deficit estimate at 3.5 per cent of GDP (3.4 per cent of GDP as per the interim budget), since the government has introduced the farmer income support scheme and also recently increased its scope,” wrote analysts at Morgan Stanley in a recent co-authored report led by Ridham Desai, their India equity strategist. READ MORE

Infrastructure over incentive to promote electric vehicles: Economic Survey

The suggestion by the chief economic advisor comes at a moment when the industry and the government's policy think tank NITI Aayog have expressed conflicting views about the road map. “We find that the market share of EVs is positively related to the availability of chargers and larger availability of chargers corresponds to greater adoption of EVs. The market share of EVs increases with the increasing availability of charging infrastructure," the Survey said. READ MORE

Pharma funds remain in poor health amid headwinds on compliance

Despite hopes of a revival last year, pharma funds remain laggards among sectoral funds amid headwinds on the compliance and pricing front in the US. Pharma funds have shed 5.1 per cent during the last three months and have declined 2.4 per cent in a year. Fund houses such as ICICI Prudential, DSP, IDBI and Mirae Asset have launched their pharma and healthcare fund offerings over the past year, expecting a change in fortunes. READ MORE

Economic Survey 2019 Highlights: Bullish on growth despite tepid numbers

The revised fiscal glide path, as per the Survey released on Thursday, envisages achieving fiscal deficit of 3 per cent of GDP by FY 2020-21 and central government debt to 40 per cent of GDP by 2024-25. The Survey notes the Medium Term Fiscal Policy Statement presented along with the Union Budget 2018-19 aimed to reach the fiscal deficit target of 3.3 per cent of GDP in 2018-19 BE. READ MORE

Budget 2019: Start-ups, investors seek tax sops, easier compliance regime

According to half a dozen experts Business Standard spoke to, the industry is looking ahead for more tax sops for start-ups, a simpler and toned-down compliance regime and a uniform policy framework that courts foreign business and investors in India as well as supports local entrepreneurship. READ MORE

10 key things brokerages expect from first Budget under Modi 2.0

All eyes are set on the first Union Budget under Modi 2.0 that is slated to be unveiled today. With a clear evidence of economic slowdown and weak corporate earnings, Finance Minister Nirmala Sitharaman has her task cut out. Deep agrarian distress, high unemployment rates, the slowdown in automobiles and consumer demand, crisis in NBFC (non-banking financial company) sector and rising pressures in real estate and housing and muted capex cycle in the economy are some of the pressing issues that need addressal. READ MORE

RITES, RVNL: Rail-related stocks gather steam. Analysts remain cautious

The Interim Budget presented in February 2019 did not disappoint rail-related companies. Railways saw an allocation of Rs 64,587 crore and capital expenditure outlay of Rs 1.58 trillion for FY20 in Interim Budget 2019 – an increase of over 8 per cent compared to last year. CLICK TO READ FULL ARTICLE


Union Budget 2019: No wild stock market swings expected today

Markets typically witness huge swings on Budget day. The Sensex has swung an average 3.1 per cent in past 21 budget day sessions, an analysis of trading data shows. This time, however, investors can expect a relative calm if the volatility gauge is anything to go by. The India VIX index ended at 13.53, down 1.2 per cent on Thursday. The index has cooled off sharply from May’s high of 28.7. Market players say the low reading signals that traders aren’t expecting any big move. READ MORE

Commodity outlook by Tradebulls Securities: Sell zinc, buy silver

Gold is, once again, trading above $1400 after mini correction from $1440 to $1382. That level is proving to be a strong resistance as gold lost its momentum twice between $1435 and $1438. We expect gold to trade positively going forward as the pool of negative-yielding government bonds around the world hit a fresh record high of $13 trillion. READ MORE

Top stock picks by Anand Rathi: Buy ITC, Nestle, Power Grid

NIFTY
 
Recommendation: BUY | TGT 12050 | SL: 11860
 
Nifty closed in the positive territory in the last trading session. The risk, however, is that it is forming a rising wedge pattern on the hourly charts which is a negative sign. Hence it needs to take off 11,970 levels in order to gain further strength. The daily, weekly and hourly momentum indicator MACD is well into buy mode, hence we recommend buying this stock.
 
NESTLE
 
Recommendation: BUY | TGT: 12600 | SL: 11600
The stock has provided a breakout from the multiple swing resistances and the momentum indicator MACD has provided a buy crossover, hence we recommend buying this stock. READ MORE

Views on Economic Survey | Deepak Jasani, Head Retail Research, HDFC Securities

  • The Survey postulates the centrality of investment as the "key driver" that catalyses the economy into a self-sustaining virtuous cycle of growth and employment when supported by a favourable demographic phase.
  • Survey focuses on nourishing MSMEs to create jobs and become more productive so that they can become internationally competitive, enhancing legal reform, ensuring consistency of policy with the vision and the strategic blueprint, reducing the cost of capital, and rationalizing the risk-return trade-off for investments.
  • The Survey lays out an ambitious agenda for behavioural change by applying the principles of behavioural economics to several issues including gender equality, a healthy and beautiful India, savings, tax compliance and credit quality.
  • All these leads us to believe that some major of these issues will be directly/indirectly be dealt with in the Budget documents or speech.
  • Expectation levels have been raised from very low levels prevailing so far.
  • It will be interesting to watch as to how the current fiscal impediments are tackled and how much of the vision objectives are immediately put into action.

Bulk deals on NSE as on Thursday

Date Symbol Security Name Client Name Buy / Sell Quantity Traded Trade Price /
Wght. Avg. 
Price
Remarks
04-Jul-2019 ALLSEC Allsec Technologies Limit FIRST CARLYLE VENTURES MAURITIUS SELL 6,84,103 286.49 -
04-Jul-2019 ALLSEC Allsec Technologies Limit SSD SECURITIES PRIVATE LIMITED BUY 6,00,005 286.17 -
04-Jul-2019 ARTEDZ Artedz Fabs Limited BHAVNA HITESH PATEL BUY 1,14,000 32.00 -
04-Jul-2019 ARTEDZ Artedz Fabs Limited DIMPLE VIPUL PATEL SELL 1,74,000 32.00 -
04-Jul-2019 ARTEDZ Artedz Fabs Limited HITESH MOHANBHAI PATEL BUY 60,000 32.00 -
04-Jul-2019 DHFL Dewan Housing Fin Corp CROSSLAND TRADING CO BUY 16,08,232 83.49 -
04-Jul-2019 DHFL Dewan Housing Fin Corp CROSSLAND TRADING CO SELL 16,25,435 83.54 -
04-Jul-2019 DHFL Dewan Housing Fin Corp TOWER RESEARCH CAPITAL MARKETS INDIA PRIVATE LIMITED BUY 20,17,857 83.95 -
04-Jul-2019 DHFL Dewan Housing Fin Corp TOWER RESEARCH CAPITAL MARKETS INDIA PRIVATE LIMITED SELL 20,17,857 83.99 -
04-Jul-2019 EROSMEDIA Eros Intl Media Ltd CHETAN RASIKLAL SHAH BUY 5,90,246 16.31 -

Derivatives Strategy by HDFC Securities: Buy Petronet July Futures

Petronet July Future
 
Recommendation: BUY
 
Initiation Price: Rs 253
 
Stop loss: Rs 247
 
Target: Rs 265
 
Rationale:
 
Long build up is seen in the Petronet Futures yesterday, where we have seen rise in Open Interest with price rising by 1.2%.
 
Stock price has broken out from the downward slopping trendline, adjoining the high of 01-April and 28-May on the daily charts.
 
Stock price has given breakout on the daily chart to close at seventeen month high with higher volumes.
 
Oscillators and Momentum Indicators like RSI and MACD showing strength in the stock on the daily and weekly charts.
 

FII/FPI & DII trading activity on NSE, BSE and MSEI


Rupee check

The Rupee Thursday furthered its gains by another 39 paise to 68.50 a US dollar.

Oil check

At 8:14 am, Brent Crude Futures were trading at $63.27 per barrel

'Indian' agenda for Modi 2.0: Eco Survey projects 7% GDP growth in 2019-20

In the first Economic Survey of Prime Minister Narendra Modi’s second term, new Chief Economic Advisor K V Subramanian constructed a growth template for India that he claimed was a “departure” from “traditional Anglo-Saxon thinking”. The Survey argued that economies were rarely in “equilibrium” but rather in either a vicious or a virtuous cycle, and went on to make the case for investment as the key driver of job creation, exports, demand, and economic growth. READ MORE

 

SGX Nifty

At 8:13 am, SGX Nifty was trading 1 point higher at 11,981 levels. 

Asian Markets check


Market to witness significant upside ahead: Sandip Sabharwal

EXPERT TAKE | Unrealistic to expect any major boost from the Budget itself: Pratik Gupta

As the markets await the government to spell out proposals in the upcoming Budget on Friday, PRATIK GUPTA, managing director and head of equities at Deutsche Bank India tells Puneet Wadhwa that given a likely US Federal Reserve (US Fed) rate cut cycle going forward, he expects inflows to emerging markets – including India – to pick up over the next six months. READ FULL INTERIEW HERE

Pratik Gupta, managing director and head of equities at Deutsche Bank India
 

Will consumption get a boost from the Budget?

The outbreak of IL&FS crisis in September 2018 and the subsequent liquidity squeeze in the system derailed the growth story of various sectors of the economy. While the auto industry continues to move in reverse gear, other consumption-related sectors such as consumer staples and FMCG (fast moving consumer goods) also seems to be in the limbo owing to an array of headwinds. CLICK TO READ FULL ARTICLE


10 key things brokerages expect from first Budget under Modi 2.0

With a clear evidence of economic slowdown and weak corporate earnings, Finance Minister Nirmala Sitharaman has her task cut out. Deep agrarian distress, high unemployment rates, the slowdown in automobiles and consumer demand, crisis in NBFC (non-banking financial company) sector and rising pressures in real estate and housing and muted capex cycle in the economy are some of the pressing issues that need addressal. READ MORE


Budget 2019: The toughest balancing act for India's new finance minister

On July 5, Sitharaman makes her first major public appearance in her new role, presenting India’s budget at a time when she’s under pressure to spend more to reinvigorate the economy. She must find resources for welfare programs announced by Prime Minister Narendra Modi’s government, including 870 billion rupees ($12.6 billion) for a new measure to support farmers. And she must do all that while keeping the national deficit below 3.4% of GDP, a target credit rating companies are watching closely. READ MORE

Budget 2019: Where Sitharaman can find a cool $1 trn for infra investment

India will need $1 trillion of infrastructure investment to nudge annual GDP growth higher by just half a percentage point in Prime Minister Narendra Modi’s second five-year term. Of this, at least 55% will have to come from public resources. Where’s the money? CLICK TO READ FULL ARTICLE

Finance Minister Nirmala Sitharaman to present Union Budget today

Newly appointed Finance Minister Nirmala Sitharaman will on Friday present the first budget of the second term of the Narendra Modi government. It will also be the maiden budget for Sitharaman, who becomes the second woman finance minister after Indira Gandhi to do so in the history of independent India. Sitharaman will present the full-year budget for the year ending March 2020. The Budget speech will begin around 11:00 am today with Sitharaman beginning it with an address to the speaker of Lok Sabha. Usually the duration of the presentation ranges from 90 to 120 minutes. READ MORE


Good morning!

Welcome to the Business Standard live blog. Catch all the updates related to Budget 2019 and the markets here

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel