Benchmarks turn jubilant post budget

Indian benchmarks gained momentum and were trading jubilantly in late afternoon session with frontline gauges surpassing their crucial levels of 28,000 (Sensex) and 8,650 (Nifty), as Finance Minister Arun Jaitley made no reference to long-term capital gains tax on equities and also set a comfortable fiscal deficit target of 3.2% for the fiscal year 2017-18. Some support also came after FM unveiled a slew of measures in income tax, small housing and small and medium businesses, among others, in the Union Budget for 2017-18. Moreover, proposal to further liberaise FDI policy too uplifted the trading sentiments. On the sectoral front, banking sector stocks gained traction after Jaitley announced that the government will infuse another Rs 10,000 crore in public sector banks for re-capitalisation. Fertilisers stocks surged after FM committed to double farmer income in five years.

On the global front, European markets were trading in green after good factory data from Europe and Asia. Asian markets were trading in green. Back home, in scrip specific development, TCPL Packaging edged higher after the company commenced the commercial production from its Flexible Packaging Unit (FPU) situated at village Dapada, Silvassa in the Union Territory of Dadra and Nagar Haveli, with effect from February 01, 2017.

The BSE Sensex is currently trading at 28049.40, up by 393.44 points or 1.42% after trading in a range of 27590.10 and 28057.41. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.22%, while Small cap index was up by 1.13%.

The top gaining sectoral indices on the BSE were Realty up by 3.40%, FMCG up by 2.30%, Auto up by 2.23%, Bankex up by 2.21% and Capital Goods up by 1.77%, while IT down by 1.76% and TECK down by 1.32% were the few losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 4.61%, ITC up by 3.78%, GAIL India up by 3.44%, SBI up by 3.31% and HDFC up by 3.25%. On the flip side, TCS down by 2.69%, Infosys down by 1.40%, Dr. Reddy’s Lab down by 1.23%, Lupin down by 1.21% and Sun Pharma down by 1.20% were the top losers.

Meanwhile, the Economic Survey 2016-17 released on January 31, has recommended an Universal Basic Income (UBI) concept as an alternative to the various social welfare schemes to eliminate poverty. The survey stated that the UBI is a powerful idea and now there is need of serious discussion on it even though time is not ripe for its implementation.

The survey further stated that the concept of UBI reduces poverty to 0.5 per cent and would cost 4-5 per cent of GDP, based on an assumption that those in the top 25 percent income bracket do not participate. Further it noted that the existing middle class subsidies and food, petroleum and fertilizer subsidies cost about 3 per cent of GDP.

The survey has said that the UBI, based on the principles of universality, unconditionality and agency, is a conceptually appealing idea, though it also pointed that a number of implementation challenges lie ahead of it. Further, based on a survey on misallocation of resources for the six largest central sector and centrally sponsored sub-schemes (except PDS and fertilizer subsidy) across districts, the economic survey has said that the districts with most requirements are precisely the ones where state capacity is the weakest and this suggests that a more efficient way to help the poor would be to provide them resources directly, through a UBI.
The CNX Nifty is currently trading at 8663.55, up by 102.25 points or 1.19% after trading in a range of 8537.50 and 8672.25. There were 34 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were ICICI Bank up by 4.48%, ITC up by 3.84% and Bank of Baroda up by 3.84%, GAIL India up by 3.25% and HDFC up by 3.23%. On the flip side, HCL Tech down by 3.52%, Tech Mahindra down by 3.36%, Idea Cellular down by 2.82%, TCS down by 2.81% and Aurobindo Pharma down by 2.37% were the top losers.

The Asian markets were trading mostly in green; KOSPI Index increased 12.91 points or 0.62% to 2,080.48, Jakarta Composite increased 37.23 points or 0.7% to 5,331.34 and Nikkei 225 increased 106.74 points or 0.56% to 19,148.08. On the flip side, Hang Seng decreased 85.87 points or 0.37% to 23,274.91.

All the European markets were trading in green; France’s CAC increased 43.85 points or 0.92% to 4,792.75, UK’s FTSE 100 increased 47.06 points or 0.66% to 7,146.21 and Germany’s DAX increased 115.87 points or 1% to 11,651.18.