Sensex gains 215 points ahead of Union Budget 2021

Sensex gains 215 points ahead of Union Budget 2021

NEW DELHI: After six days of unabated sell off, benchmark indices rebounded on Monday as buying in financials and select auto names took them higher ahead of the Union Budget scheduled later in the day.

Sensex has lost over 3,500 points since it hit 50,000 mark as FIIs pulled out money from the market. Traders are expecting a volatile day ahead as movement in the market will be decided by what Nirmala Sitharaman has in her kitty.

“Markets are likely to turn highly volatile today responding to positive and negative Budget proposals. Besides the budget, an area of concern is the huge FPI outflows which touched a high of Rs 5,930 last Friday. There is a huge outflow from other emerging markets too. Part of this is due to the issues in the US market relating to the hit to hedge funds from the ‘GameStock short squeeze’” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

“On the positive side, there are steadily improving news relating to the economy and corporate revenue & profits. IMF projects India’s growth rate for 2021 & 2022 at 11.5 per cent and 6.8 per cent respectively making India the fastest-growing large economy in the world for the two year period.”

Factors driving markets

  • Union Budget: Finance Minister Nirmala Sitharaman will present her third budget. The focus is likely to be on agriculture, healthcare and Make in India to generate jobs and give a boost to the economy.
  • Doubts on stimulus: Doubts have also emerged about the future of President Joe Biden‘s $1.9 trillion relief package, with 10 Republican senators urging a $600 billion plan.
  • Chinese factory output slows: Two surveys from China showed factory activity slowed in January as restrictions took a toll in some regions.

How are bluechips doing

After opening in the green, benchmark indices pared some losses. At 9.41 am, BSE flagship Sensex was up 215 points or 0.47 per cent to 46,501. NSE benchmark Nifty followed and added 44 points or 0.33 per cent to 13,679.

“For the day, we expect volatility to be high and movements to be sensitive to newsflows. With 13,700 clearly broken, immediate support for Nifty now lies at 13,354 followed by 13,100. On the upside, immediate resistance is at 13,700 followed by 14,000. We suggest traders refrain from building long positions until the index is below 14,000,” said Abhishek Chinchalkar, CMT Charterholder and Head of Education, FYERS.

In the 50-share pack Nifty, IndusInd Bank was the biggest gainer, up 7.63 per cent. ICICI Bank, HDFC, BPCL, IndianOil, Tata Steel, ONGC, HDFC Bank, Sun Pharma and Titan were among other gainers.

UPL was the top loser in the pack, down 7.16 per cent. Dr Reddy’s Labs, Tech Mahindra, Cipla, Tata Motors, Adani Ports, HCL Tech, Bajaj Finance and Wipro were other losers in the pack.

Broader markets

Broader market indices traded with cuts underperforming their headline peers in morning trade. Nifty Smallcap down 0.56 per cent while Nifty Midcap dipped 0.53 per cent. Broadest index on NSE, Nifty 500 was up 0.23 per cent.

AB SFB, Oberoi Realty, Dr Lal Pathlabs, IDBI, PVR and Omaxe were among major gainers from the space while Sonata Software, RVNL, Vakrangee, IDFC First Bank, Dhani Services and JSW Energy were under selling pressure.

Global markets

MSCI’s broadest index of Asia-Pacific shares outside Japan recouped early losses to rise 0.7 per cent, bouncing after four straight sessions of losses.

Japan’s Nikkei added 0.8 per cent, after shedding almost 2 per cent on Friday, while Chinese blue chips gained 0.5 per cent as the country’s central bank injected more cash into money markets.

Wall Street indexes pared their losses but futures for the S&P 500 were still off 0.3 per cent, while NASDAQ futures fell 0.4 per cent.

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