The Indian equity market may trade in positive territory on May 14, supported by select pockets such as PSU banks and NBFCs after the Finance Minister Nirmala Sitharaman's announcement regarding the NBFCs, MSMEs and real estate, experts said.
Experts, however, added that a clear picture will emerge only after the FM is done with all announcements and the market till then may trade in a balanced way.
"The market has reacted positively even before the announcements, but we have to wait for more announcements to get a clear picture. It looks to be a good beginning but the market will want to look for more announcements coming in the next few days. NBFCs, power sectors will be benefitted from these measures, and real estate got a huge relief. Overall, these measures will not lift the market mood, but some pockets will see get some strength," said Nilesh Shah, Founder and CEO of Envision Capital, talking to CNBC-TV18.
While the FM's announcements may influence the mood of the market, the benchmark indices may not see a surge as they are driven by large private sector banks which are not likely to gain much from the FM's announcements.
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"The index is driven by large private sector banks and the measures announced by the FM is more beneficial by PSU banks. Overall, however, it will have a positive rub off on the entire market," said Pankaj Pandey, Head of Research at ICICI Securities.
Gaurav Dua, Senior VP, Head Capital Market Strategy & Investments at Sharekhan by BNP Paribas said the equity market is expected to appreciate the measures and not celebrate it with a big surge due to two key uncertainties - the mechanism to fund the relief package and quantum of immediate outflow from the government coffers.
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As far as the level of the market is concerned, Vikas Jain, Senior Research Analyst at Reliance Securities believes there will be a flat opening on May 14 and on the higher side, 9,500 will continue to be a resistance. A close above 9,500 levels will witness sharp up move, said Jain.
Nitin Shahi, Executive Director, Findoc, said that the market should open in the green and Nifty may hover between 9,400-9,500 levels on May 14.
"It will ease out the situation and give the market much-needed light at the end of the tunnel which was getting darker with rising COVID-19 cases in India and bring back the mojo among all corporates," said Shahi.
The Finance Minister announced the first tranche of the mega stimulus package on May 13 and said that the remaining details of the Rs 20 lakh crore stimulus package will be disclosed in the next few days.
For NBFCs, HFCs and MFIs, the FM announced Rs 45,000 liquidity infusion through a partial guarantee scheme which will cover commercial papers and borrowings.
The first 20 percent loss will be borne by the guarantor - the government.
"We are launching Rs 30,000 crore special liquidity scheme where the government will buy investment-grade debt papers of NBFCs, HFCs and MFIs - not high quality only. These securities will be fully guaranteed by GoI. We hope that these NBFCs - which do not have high-quality debt papers, can then support the MSMEs dependent on them," said Sitharaman.
Rashesh Shah, chairman and chief executive officer of the Edelweiss Group told CNBC-TV18 that the faster execution of these measures is important.
"Rs 30,000 crore liquidity facility for NBFC/HCs/MFIs and Rs 45,000 crore Partial Credit Guarantee Scheme 2.0 both will bring risk-taking capacity back in the market," said Shah.
A big-bang announcement of Rs 20 lakh crore stimulus by the Prime Minister Narendra Modi lifted market sentiment on May 13 as the Sensex and the Nifty closed 2 percent higher each.
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