Market Overview & Budget Analysis

 

Market Overview Today:

 Important update let's now look at the market opening 137 points higher on the nifty make it 140 17709 is what we have remember the 20 day moving average on the nifty 17768 and that ties in with the 500 call writers so this is a zone of minor resistance for the nifty 17700 to 17750.

In terms of stocks ITC is continuing from its yesterday's gains in fact it's a fresh breakout on ITC two percent higher Bajaj finance is up two percent Kotak is up two percent indecent bank is up one percent bpcl is up so there's a bit of a banking flavor which is visible the bank nifty is up good one percent in trade bpcl is recovering from yesterday's loss up about one and a half percent Hcl Tech Infosys Wipro HDFC bank Reliance all doing well i guess some money moving from tech mahindra to other it.

Stocks Tech mahindra is down about three percent in trade Adani ports is down about two percent going through losers because the shorter list Sun Pharma is seeing some profit taking but other than that all guns blazing and really what's helping the market now is that the the banks kotak mahindra bank is leading from front two percent higher quarter is the only stock which hasn't made a decent move in trade compared to other banks access is moving up as well hdfc tata motors so looks like all guns blazing for starters at least one absolutely.

It is very good opening for the mid cap index 2 up almost 165 points right now half a percent higher for the mid cap index very strong advanced decline ratio as well i just want to point out a couple of stocks tata tele is up almost about four odd percent five percent now in tata telly the company has withdrawn the government's equity conversion plan so there is a bit of a relief there tara delhi are piling up in terms of volumes as well so keep an eye out there kpid technology is up almost about three and a half percent in fact this entire space there's a lot done for electric by boosting of electric vehicles with respect to battery swapping interchangeability as well so all of that has got this entire space quite.

On month basis there's been an improvement year on year as well Ashok layland has seen a big pickup double digit growth in the medium and heavy commercial vehicle space so that one is looking quite good this morning gained earn 133 rupees now on ashok leyland on the flip side though some of these tractor makers continue to be under pressure both eminem and scots have reported very weak numbers this time around hero motor cops numbers are also on the weaker side tech mahindra reported a fall margins quarter on quarter so the street did not like that and a couple of more stocks there's a capex push in the budget that we saw this time around so all those stocks you know whether it's cummins abb india lnt voltas that whole lot is up anywhere between half thermax is up two and a half percent Lnt is piling on some more weight so that capex push is definitely having a rub off impact but i show clearland is really the start of the morning two and a half percent higher now on the back of good numbers posted there so what third day running now the market is in the green absolutely i mean this is a good start.

Budget Analysis:

The budget's standout feature is that the government is underestimating tax revenues for the second consecutive year, and I'll give you some numbers. They have revised the net tax revenue growth for the current year fi 22 from 15.45 trillion, which they estimated last year, to 17.65 trillion, so clearly 2 trillion they underestimated last time but even that is an underestimation, and if you look at the rate of growth, the budget last year estimated net tax revenue to grow by 8.3 percent.

It will grow by 24, but if you look at the april, december tax revenue growth, the net tax revenue increased by 50%, so even if you assume a more conservative 30 percent growth in tax revenues for jan, feb, march, it stands to reason that the net tax revenue this year will end at between 19 and 20 trillion, which is at least two to three trillion more than what the budget is estimating.


The fiscal deficit has come in at 16.65 trillion rupees, whereas the market was at best prepared for 15 and a half trillion gross market borrowing at worst the market expected 13 trillion the government is going to borrow 14.3 trillion rupees now there is underestimation the second major standout for me is the way in which the deficit number has stunned the bond market you know fiscal deficit has come in at 16.65 trillion rupees whereas the market was at best prepared for 15 and a half trillion gross market borrowing at worst.

In the press conference they said there is a beeps issue of taxes but for the market it means that foreigners are not going to buy and that is why bond yields have risen to 6.85 from 6.68 before the budget was announced a sharp increase because the market is really worried where is the appetite for a 45000 crore borrowing every week that will hit the market starting in April you know there is little comfort that all the taxes have been underestimated.


Renewable and green energy

First one government announced additional expenditure of 19500 crore rupees that is for manufacturing of solar pv modules that is under the pli scheme.

Second is that the government spoke about sovereign green bonds and that is for financing a sustainable infrastructure and green infrastructure.

Third one is the fact that the government also spoke about usage of biomass pellets in thermal power plants that of course will reduce emissions.

Fourth one is that the unblended petrol or the fuel will have higher taxes that is an excise duty of additional two rupees per liter so you have to focus on using petrol which is blended with ethanol and the fifth one is a battery swapping technology or a policy that will be coming in order to ensure higher usage of electric vehicle so e-mobility is something that the government is focused.