Closing Bell: Nifty ends sub-12K ahead of Budget 2020, falls close to 2% in Jan

Ajit Mishra, VP - Research, Religare Broking:

The Indian equity benchmark indices continued their downtrend and ended Friday’s session on a negative note ahead of the union budget. Profit taking was witnessed at higher levels as the Nifty index ended sharply lower by 0.6% at 11,962 levels. Amongst the broader markets, BSE-Midcap ended in-line with the benchmark however Smallcap ended with losses of 0.3%. On the sector front, barring Banks, Consumer Durables and Realty, all the other sectoral indices witnessed selling pressure, wherein Metals, Oil & Gas and Power were the top losers.

We expect markets to remain volatile in the near term given the muted global cues. In addition, the next catalyst for any decisive move would be the union budget as expectations are high that government would announce some measures to boost economic growth. However, some consolidation in the Indian markets cannot be ruled out if the budget fails to live up to the expectations.

Deepthi Mary Mathew at Geojit Financial Services:
 
The Survey highlights the difficult fiscal situation ,and possible crowding out of private investors due to the increased market borrowing by the government. However, the survey also stresses the need for relaxation of fiscal deficit target for the current year to stimulate growth in the economy. In this background, it is expected that the fiscal deficit target for FY21 would also settle at a higher range. It is welcoming that the survey emphasizes the need for improving the business climate that would aid the economy to achieve the target of $5trillion.

Shrikant Chouhan, Senior Vice-President, Equity Technical Research, Kotak Securities:

The market witnessed a choppy trend ahead of the budget session and the Nifty index fell over 70 points. The market opened on a strong note, but lack of follow-up buying and the cautious stance adopted by the investors resulted in the index failing to sustain above the 12000-mark. We are of the view that weakness appears to be steadily creeping in the market once again as all eyes are on the tomorrow’s Union Budget event. Technically, the Nifty closed well below the support level of 12000, indicating short-term weakness. In next few trading sessions, 12000 level would be the trend decider level, below the same we could see extended correction dragging the index to 11930-11800 levels. On the other hand, trading above 12020 could trigger a quick pullback rally till 12100- 12150 level. The volatility is likely to increase on the budget day. The strategy should be to buy deep out of the money options so that loss will be minimal.

Indian Hotels Q3 result: Consolidated net profit rose 25.4% at Rs 213.2 crore against Rs 170 crore and revenue was up 3.7% at Rs 1,372.7 crore versus Rs 1,323.5 crore, YoY.

Power Grid Corporation Q3: The company's net profit was up 14.6% at Rs 2,673.5 crore versus Rs 2,332.3 crore and revenue was up 6% at Rs 8,992 crore versus Rs 8,481.3 crore, YoY.

HUL Q3 result: The company's Q3FY20 net profit rose 11.9% at Rs 1,616 crore versus Rs 1,444 crore and revenue was up 2.6% at Rs 9,808 crore versus Rs 9,558 crore, YoY.

Karan Mehrishi, Lead Economist – at Acuite Ratings & Research:

The Economic Survey of 2019-20 has highlighted the importance of reforms in achieving the USD 5 trillion GDP target. The expectation is that economic recovery will start H2 FY20 onwards marking the start of a 12 quarter business cycle. The recent reforms such as the public sector bank mergers, enactment of the IBC along with GST led formalization have seen off the initial challenges and are expected to fuel the recovery going forward. The need for augmenting fixed investments by households along with public and private sector has also been pointed out. It rightly advises a guard against inflationary tendencies but an accommodative monetary policy is advised, nonetheless. Overall, the economic survey maintains a cautious optimism and pegs FY21 GDP growth at 6-6.5%.

Sanjeev Zarbade, VP PCG Research, Kotak Securities:

The BSE-30 Index declined 2% in the current week, with most major global markets registering a weekly decline in USD terms. Market participants were perturbed by the risks to global trade from the outbreak of a new coronavirus and a mixed set of results in 3QFY20. IndusInd Bank, Tata Steel and Bharti Airtel were among the top losers in the BSE-30 Index, while Bajaj Finance, Tech Mahindra and L&T were among the top gainers. On the economy front, the US Fed kept rates unchanged. FPIs sold equities worth USD 43 mn over the past five trading sessions while DIIs bought USD 235 mn worth of equities in the same period.

Market Close: Benchmark indices ended lower for the second consecutive day with Nifty finished below 12,000 level ahead of an important event Budget 2020, which will be presented by Finance Minister Nirmala Sitharaman on February 1.

At close, the Sensex was down 190.33 points or 0.47% at 40723.49, while Nifty was down 73.70 points or 0.61% at 11962.10. About 970 shares have advanced, 1406 shares declined, and 160 shares are unchanged. 

Tata Motors, ONGC, Power Grid, UPL and IOC were among major losers on the Nifty, while gainers were Kotak Mahindra Bank, SBI, IndusInd Bank, Bharti Airtel and Bajaj Auto.

Except bank, all other sectoral indices ended in the red. BSE midcap and smallcap are also ended lower.

Govt sees FY21 GDP at 6-6.5%: key takeaways from Economic Survey 2020

"We may need to relax fiscal deficit target for FY20 to revive growth and need counter-cyclical fiscal steps to boost demand," the government said in the survey.

Tech Mahindra Q3 result: The company net profit at Rs 1,146 crore and rupee revenue at Rs 9,655 crore.

Jubilant Life Sciences slips 3% post result: Company's consolidated net profit down 24 percent at Rs 203.4 crore versus Rs 267.5 crore and revenue was down 2.6 percent at Rs 2,315 crore versus Rs 2,377 crore, YoY.