Dear
Trader…
The Indian stock market surged an estimated 10% after the
budget on the back of tax-free as well as provisions for various industries.
However, there are still fifteen days to go before the completion of the budget
month.
Today, the markets are likely to open in red following
mixed global cues. Some support will come as the government approved
applications from several medical devices manufacturers under the Production
Linked Incentive (PLI) scheme for the promotion of domestic manufacturing.
Markets made negative start as traders got anxious with
Fitch’s statement that India’s medium-term growth outlook will assume a more
critical role in sovereign assessment due to higher deficits and a slower
consolidation path. Also, India recorded fresh Covid-19 cases of the corona
virus disease (Covid-19). However, benchmark indices soon turned positive on
the back of heightened volatility. Traders also took note of SBI Research
revised its contraction forecast for the current fiscal year to 7 per cent. The
agency had earlier forecast a 7.4 per cent contraction in 2020-21 GDP numbers.
Sentiments remained positive as DIPAM Secretary Tuhin
Kanta Pandey stated that the new PSE policy announced by the government has
opened a host of opportunities for the private players who now partake in
India’s growth story by buying the brownfield assets of public sector
enterprises at an attractive valuation. Traders took note of report that
salaries in India are projected to rise by an average of 6.4 per cent in 2021,
marginally higher than the average actual increase of 5.9 per cent in 2020. As
per the survey, on average, 20.6 per cent of the salary increase budget is
being allocated to top performers, which represent 10.3 per cent of the
employees in India
Corporate India’s quarterly results for the end of
December 2020 were better than expected, with the stimulus for infrastructure
in the budget and the continued attractiveness of the provisions for the financial
sector.
We believe the current leg of profit booking followed by
higher base formation, after a sharp run up would make market healthier
therefore, investors should not construct the current profit booking as
negative; rather utilize the same as an incremental buying opportunity to
accumulate quality banking stocks.
The trend deciding level for the 15th February is 15202.
If NIFTY trades above this level then we may witness a further rally up to 15272-15303
levels. However, if NIFTY trades below 15088 levels then we may see some profit
booking initiating in the market,
The Nifty future index has immediate support at 15088 levels, sustaining above which will lead to a pullback in the coming week. Failure to do so will signal extended correction.
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