Bulls completely outclass Bears on Tuesday

Bulls retained full charge over Dalal Street on Tuesday, with Sensex & Nifty ending higher by around 2.30% each. After a fabulous start, indices remained firm for the whole day, aided with Minister of State for Finance Anurag Thakur’s statement that the economy is not in recession and India recorded the highest average growth among the G-20 nations during 2014-19. The minister also mentioned about continuous measures being taken by the government to improve the overall investment climate and boost the economic growth. Adding some comfort, Finance Minister Nirmala Sitharaman said that the money raised through disinvestment will be used to develop infrastructure, which will have multiplier effect on the economy and not bridging revenue deficit.

Key benchmarks extended their northward journey in the second half of the trading session to settle near their intraday high points, after Niti Aayog CEO Amitabh Kant termed the Union Budget pragmatic and said the government is determined to bring Indian economy back to a high trajectory growth path. He further said if the government will be able to achieve disinvestment target of 2020-21 then the Budget will be very successful. Besides, Reserve Bank of India Governor Shaktikanta Das headed six-member rate setting panel started its three-day brainstorming meeting in the backdrop of Union Budget projecting a widening of fiscal deficit amid slowing economy and hardening inflation.

On the global front, European markets were trading in green terrain, after Greece's manufacturing sector improved at the fastest pace in five months in January. The survey results from IHS Markit showed that the manufacturing purchasing managers' index, or PMI, rose to 54.4 in January from 53.9 in December.  Asian markets ended higher, as Malaysia's exports rose unexpectedly in December and imports increased at a slower-than-expected rate. The data from the Department of Statistics revealed that exports rose 2.7 percent year-on-year to MYR 86.4 billion in December. Imports increased 0.9 percent to MYR 73.8 billion.

Back home, the metal industry stocks ended higher, despite credit rating agency, India Ratings and Research (Ind-Ra) revised its outlook on the steel sector to 'stable-to-negative' for the remaining of ongoing fiscal (FY20) given sluggish steel demand growth expectations owing to mix of structural and cyclical concerns in end-user sectors, primarily auto and real estate construction. Further, the cement industry stocks remained in watch, after cement manufacturers association (CMA) said that the government's budgetary push for infrastructure, logistics and warehousing will boost the industry.

Finally, the BSE Sensex gained 917.07 points or 2.30% to 40,789.38, while the CNX Nifty was up by 271.75 points or 2.32% to 11,979.65.

The BSE Sensex touched high and low of 40,818.94 and 40,117.46, respectively and there were 28 stocks advancing against 02 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 1.37%, while Small cap index was up by 1.29%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 3.52%, Metal up by 3.29%, Oil & Gas up by 3.07%, Energy up by 3.02% and PSU up by 2.78%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Titan up by 7.55%, ITC up by 3.85%, HDFC up by 3.76%, Bajaj Finance up by 3.58% and Tata Steel up by 3.55%. On the flip side, Bajaj Auto down by 3.86% and Hindustan Unilever down by 1.08% were the only losers.

Meanwhile, Finance Minister Nirmala Sitharaman has said the money raised through disinvestment will be used to develop infrastructure. This will have multiplier effect on the economy and not bridging revenue deficit. The government set an ambitious disinvestment target of Rs 2.10 lakh crore for the next financial year (FY21), which includes selling stake in BPCL and insurance behemoth Life Insurance Corporation of India (LIC).

Sitharaman mentioned ‘we are showing the direction. We are telling you where the money is going to be spent so that you can plan your investments and your investments and your expansion well in alignment with what government does... you will facilitate the government and we will equally facilitate the private sector.’

Besides, citing an example, she said import of those medical equipment which are not made in India will come at a duty, but duty collected will be utilised to fund creating medical infrastructure in aspirational districts where there are not good hospitals. She said when the government puts money infrastructure, it has cascading effect and give rise to economic activity.

The CNX Nifty traded in a range of 11,986.15 and 11,783.40. There were 45 stocks advancing against 05 stocks declining on the index.

The top gainers on Nifty were Titan up by 7.30%, Bharti Infratel up by 5.67%, IOC up by 5.60%, Bajaj Finserv up by 4.94% and BPCL up by 4.34%. On the flip side, Zee Entertainment down by 5.30%, Bajaj Auto down by 3.76%, Yes Bank down by 2.78%, Eicher Motors down by 1.81% and Hindustan Unilever down by 0.87% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 99.72 points or 1.36% to 7,426.03, France’s CAC rose 71.26 points or 1.22% to 5,903.77 and Germany’s DAX was up by 144.93 points or 1.11% to 13,190.12.

Asian markets ended higher on Tuesday as Chinese markets reversed some of their previous session's plunge on the back of stimulus measures announced by China to support the economy and markets amid the deadly corona virus outbreak. As the death toll in mainland China from the new type of virus rose to 425, China has agreed to allow US health experts into the mainland as part of a WHO effort to help fight the corona virus. Further, Japanese stocks closed higher by tracking a rebound in Shanghai shares, although exporters ended broadly lower on a slightly stronger yen.