Markets to get a flat-to-positive start, Budget session eyed

The Indian markets despite a choppy trade managed to extend the gaining streak in the last session and the major averages gained over a quarter percent. Today, the start is likely to be in green tailing the overnight gains in the US markets. However, traders will be eyeing the stormy start of the budget session of Parliament, with opposition targeting the government on a range of issues. The government has prioritised 32 items for the session, which includes 11 bills pending in Rajya Sabha and one in the Lok Sabha. Meanwhile, Economic Affairs Secretary Shaktikanta Das, terming the projected 7.6 percent growth for the current fiscal as “very, very significant” has expressed the government's commitment to work towards boosting economic growth. Traders are likely to turn cautious in latter trade, on report that exports of over half of the sectors, out of the 30 closely monitored by the Commerce Ministry, were in the negative zone in January due to a fall in global prices and demand. There will be some buzz in the PSU stocks, as the government is divesting five per cent of its stake in NTPC through the offer-for-sale route, the sale is expected to garner Rs.5,029 crore at a floor price of Rs.122 per share. 

The US markets ended higher in last session, adding to the strong gains posted in the previous week, mainly on a sharp increase by the price of crude oil. Though, some of the traders remained on sidelines amid a lack of major US economic data on the day. The Asian markets have made a mixed start with some of the indices trading in red. Chinese market was down as the yuan declined after the People’s Bank of China lowered its daily reference rate by the most in six weeks.

Back home, Monday’s trading session was clearly of consolidation as the Indian frontline equity indices appeared a bit fatigued and remained in tight band throughout the day. Nevertheless, the benchmarks managed to extend the winning momentum for the fourth consecutive day of trade as local sentiments continued to show signs of improvement. Traders took some encouragement with the Economic Affairs Secretary Shaktikanta Das’s statement that the Union Budget 2016-17 will try to address the key challenges of the economy and give an impetus to growth. He also added that the government is committed to not only maintain the 7.6 per cent growth but also improve it. Higher growth will lead to job creation, more economic activities and development.  Furthermore, some encouragement also spread by Finance Ministry with the proclamation that the quality of government expenditure has improved significantly in the current fiscal and is resulting in high growth. According to CGA data, it was 74.4 per cent of Budget Estimate at the end of December, as compared to 61.3 per cent a year ago. However, market participants remained cautious with the report that overseas investors have pulled out a massive Rs 4,600 crore from the Indian capital markets this month so far, primarily on account of continuous fall in crude oil prices and fears of a global slowdown. Meanwhile, all eyes would be on the Budget session of Parliament that will be commencing on February 23 and will focus largely on the financial business of the government. The Rail Budget will be unveiled on Thursday, economic survey on Friday and the Union Budget next Monday. On the global front, Asian share markets ended mostly higher, while European shares too rose on Monday. Back home, the benchmark got off to a soft start as the indices showed signs of consolidation in early trade. But the frontline indices slowly started gathering steam and surged by around quarter a percent by late morning trades. But the indices failed to capitalize on the initial momentum and continued to trade in a tight range for most part of the day. Finally, the BSE Sensex gained 79.64 points or 0.34% to 23788.79, while the CNX Nifty added 23.80 points or 0.33% to 7,234.55.