STOCK MARKET LIVE: Sensex, Nifty end higher; how Budget 2019 may impact share market? Here are todays experts advice
STOCK MARKET LIVE: Sensex, Nifty end higher; how Budget 2019 may impact share market? Here are todays experts advice
Domestic equity indices ended the day (Tuesday) with gains. The market has been volatile through the day as concerns over global trade uncertainties loom. BSE Sensex ended 130 points higher at 39,816, while NSE's Nifty 50 settled at 11,910.30. In the morning trade, BSE Sensex was trading 122.76 points lower at 39,563.74, while NSE's Nifty 50 was trading below 11,850 level. Tata Motors, YES Bank, Hero Motors, Bajaj-Auto, and Bajaj Finance are the top losers on bourses. Asian shares were choppy on Tuesday over global uncertainty.
Here are the experts' analysis on stocks and sectors:
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Unlike the past, the voluminous budget documents will not be printed this year following the COVID-19 protocol and will instead be distributed electronically to the Members of Parliament (MPs). Previously, the halwa ceremony marked the launch of printing exercise for the budget.
Nifty trend:
Stock market surged higher on Tuesday after a negative morning session. Indian equity benchmarks extended gains for the second consecutive trading session, led by the gains in technology shares. The Nifty index ended 44.7 points or 0.38% higher at 11,910.3. Broad market indices like the BSE Mid Cap gained more, thereby outperforming the Sensex. Market breadth was negative on the BSE/NSE.
Sectorally, the top gainers were the BSE Oil and Gas, IT, Power and Telecom indices. The top losers were the BSE Realty, Healthcare and Bankex indices.
"Technically, with the Nifty recovering smartly and closing at a 2 week high, the bulls seem to be in control. Further upsides are likely once the immediate resistance of 11917 is taken out. Next resistance is at 11962-12000. Crucial supports to watch for any weakness are at 11831," said Deepak Jasani, Head Retail Research, HDFC securities.
BSE Sensex ended 130 points higher at 39,816, while NSE's Nifty 50 settled at 11,910.30.
Budget 2019 expectations: What steps should be taken to increase the participation of retail investors in the stock market?
Tejas Khoday, CEO and co-founder of FYERS- Free Investment Zone, said the stock market has been mostly in the negative teritorry over the last 18 months with retail investors losing heavily due to severe volatility in mid and small caps. Also, the stock market has been besieged by news of corporate frauds or poor ethical and corporate governance by many companies which have resulted in stock prices crashing by 70-80% in a short period of time. Equity fund flows have been severely dented and are way below the 10,000 cr per month average mark seen in 2018.
Trust deficit and credibility issues are a couple of reasons for retail investors to shy away from stock market investments. Govt needs to adopt and enforce stringent measures to restore investor faith & confidence in businesses, laws and regulations, he said.
Budget 2019 stock market expectations:
Tejas Khoday, CEO and co-founder of FYERS- Free Investment Zone said after a volatile year between 2018 and 2019 Budgets, where more than 75% of BSE All Cap Index gave negative returns, the stock market has shown a little life and colour over the last couple of months with equity fund flows seeing a minor rise, accompanied by retail investor participation. Any measures to boost investor sentiment would be greeted with a cheer, which could include: Reducing LTCG tax arising from the sale of equity shares (without indexation benefit) from the current 10% to a level of 5%, increasing LTCG exemption gain from the current Rs. 100,000 to Rs. 200,000 and above and removal of the current 10% LTCG tax on equity mutual funds.Open interest for July series in Nifty and Bank Nifty:
Highest total Open interest for July series in Nifty was noted at 12,000 strikes in calls and 11,500 strikes in puts. Significant additions were noted at 11,800, 11,900 strikes in puts and 12,300, 12,400 strikes in calls, a JM Financial report stated.The Bank Nifty closed the day (Monday) in the green, up 267 points over previous day. OI PCR for monthly expiry was seen at 0.85. The Open interest distribution for weekly contract suggests resistance at 31,500 and support at 31,000, it said.
ICICI Bank share (BUY)
Brokerage Edelweiss said ICICI Bank, over the previous decade, was caught on the wrong side of the cycle. However, it believes that focused approach, structural changes and cyclical tailwinds ensure a sustainable franchise. Given the improved visibility, it revised the target price to Rs 585. It maintains ‘BUY/SO’ and retain it as our top pick in financials."Our meeting with ICICI Bank’s top management (Sandeep Bakhshi, MD & CEO) reaffirmed our conviction that the management is laying a strong foundation for sustainable, prudent and profitable growth. The new management is: a) shifting focus to customer profitability at operating level; b) decentralising decision making; c) single-mindedly focusing on >20% core profit growth; and d) strengthening liability franchise with focused ramp-up in retail term deposits. We believe, the change in tack—granularity, de-risking, people involvement—ensures steady quality earnings, which will be progressively valued up as the market gains confidence on sustainability," the brokerage said.
"Consequently, we upfront the possible valuation expansion assigning 2.5x BV (2.0x earlier) leading to revised SOTP based TP of INR585 (earlier INR493) even though near-term earnings/RoE remain broadly intact. Maintain high conviction ‘BUY’ and as our top pick in the sector."
Edelweiss IT sector outlook: Infosys, Tech Mahindra, TCS and Wipro:
Brokerage Edelweiss said it was positive on IT sector on the basis of demand. "We prefer large caps due to their execution capabilities, ability to invest in capabilities and better valuations. Mid caps need to maintain a balancing act between profitability, retaining talent and growing faster—a difficult ask we believe. We maintain ‘BUY’ on Infosys, Tech Mahindra and HCL Tech, and ‘HOLD’ on TCS and Wipro. In mid caps, we prefer L&T Infotech and L&T Technology Services and maintain ‘BUY’ on both," the brokerage said.
Power sector shares: Edelweiss BUY call on NTPC, CESC and Tata Power
Brokerage Edelweiss said that a new payment security mechanism by the Ministry of Power (MoP) mandates discoms to provide an adequate amount of letter of credit (LC) and allows generators to encash them. The new payment security mechanism, in its view, is a very positive development for the power sector and plugs major pilferage in the system, as it would protect generators, ensure timely payments and reduce counterparty risk. Banks, on their part, would be cautious about issuing LCs to discoms with a track record of payment delays, thereby eventually fostering payment discipline among discoms as well nudging them to improve their financial health, it said. The brokerage said that it maintains BUY on NTPC, CESC and Tata Power in that order.UPL, ONGC, Coal India, BPCL, and NTPC are the top gainers in Nifty 50.
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