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Investors expect Budget to be fiscally prudent

Mail Today Bureau     July 5, 2014

The Nifty hit a life-time high on Friday as blue chips such as Reliance Industries and HDFC Bank rose with investors pouring in money on the expectation that Union finance minister Arun Jaitley would present a fiscally prudent and growth-oriented Budget next week.

{blurb}The broader Nifty ended 0.48 per cent higher at record 7,751.60 gaining 3.2 per cent this week. The benchmark BSE Sensex jumped over 138 points, or 0.54 per cent, to end at a new closing peak of 25,962.06 led by oil and gas shares.

Foreign institutional investors (FIIs), who have been the mainstay of the 23 per cent gain in the broader Nifty so far this year, bought shares worth  Rs 951 crore on Thursday, according to figures released by the Securities and Exchange Board of India on Friday. "Most investors, including FIIs, are putting new money in the market on hopes the Budget will lead the way to a revival in the economy. Build-up of positions has already started," said Deven Choksey, managing director, KR Choksey Securities.

"The Budget may focus on revival in growth and fiscal consolidation. We are bullish and expect the Nifty to trade between 7,500 and 8,000 in the near term," he added.

Traders said receding fears of the impact of a delayed monsoon on prices and strong global cues after upbeat US data and easing oil prices also boosted the market sentiment.

Blue chips were among the leading gainers. Reliance Industries ended 2.5 per cent higher marking its biggest single-day gain since June 6. HDFC Bank was up 2.4 per cent while public sector power utility NTPC gained 0.8 per cent.

Investors also hedged their risk by buying defensives such as Dr Reddy's Laboratories, which was up 1.5 per cent, and Sun Pharmaceutical Industries, which ended 0.4 per cent higher. Bharti Airtel gained 0.7 per cent after the Reserve Bank of India increased the limit for overseas investors to buy shares in the company.

However, recent outperformers such as metal stocks were under selling pressure. Hindalco Industries ended 0.3 per cent lower adding to its 2.52 per cent fall on Thursday.

The stock still gained 7.7 per cent this week. Tata Steel ended 0.5 per cent lower. Market breadth continued to remain positive as 1,683 stocks finished with gains while 1,357 stocks ended lower. Total turnover rose to Rs 3,862.53 crore from Rs 1,429.99 crore on Thursday. "We believe the benchmarks will continue their positive move on Monday as well. However, volatility is a key concern among the participants nowadays and it will continue to remain so due to the upcoming Union Budget," said Jayant Manglik of Religare Securities.

Most Asian stocks ended higher today as US jobs growth bolstered the outlook for the world's largest economy. Key benchmark indices in Hong Kong and Japan moved up by 0.06-0.58 per cent while indices in China, Singapore, South Korea and Taiwan moved down by 0.03-0.19 per cent. European markets were trading lower as Germany factory orders fell more than expected in May.

Key benchmark indices in France, Germany and UK moved down in 0.06-0.13 per cent. US stocks rose on Thursday with the Dow Jones Industrial Average hitting 17,000 for the first time and the S&P 500 index also scaling records after June jobs report.


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