Economic Survey fails to cheer market; Nifty ends below 12K

The Economic Survey, which highlighted the need to push reforms, failed to lift markets and Nifty50 closed below its crucial support of 12,000 on Friday for the first time since January 6.

Sensex, Nifty & Nifty Bank post 1st monthly loss since August 2019. Market breadth favoured declines; advance-decline ratio at 1:2. The Nifty fell 1.6 percent in January 2020.

The S&P BSE Sensex failed to hold on to 41,000 mark, and witnessed selling pressure in the second half of the trading session. For the week, both Sensex and Nifty50 are down by over 2 percent each so far in the week. Markets will remain open for trading on Budget Day, 1st February.

Let’s look at the final tally on D-Street – the S&P BSE Sensex dropped 190 points to 40,723 while the Nifty50 closed 73 points lower at 11,962 on Friday.

Sectorally, action was seen in the S&P BSE Telecom index, followed by Realty, Consumer Durables, Bankex and Finance. Profit taking was visible in BSE CPSE, Oil & Gas, Energy, and Metal indices.

Broader market performed in line with benchmark indices – the S&P BSE Midcap index fell 0.61 percent while the S&P BSE Smallcap index was down 0.24 percent.

The Economic Survey 2020 highlighted the importance of reforms in achieving the $ 5 trillion GDP target. It guided for accommodative monetary policy from the central bank. It pegged FY21 GDP growth at 6-6.5%.

The Survey guided for aggressive divestment for govt. PSU which led to a ruboff effect on the S&P BSE CPSE index that fell over 3%, and was also the top loser among thematic indices.

For India to become a $ 5 trn economy, the survey emphasises free-market dynamics and trust, conducive policies for entrepreneurship, labor-intensive export plan and the need to avoid crony capitalism & irrelevant government intervention.

The survey also highlighted that the FY20 fiscal deficit may have to be relaxed to support growth and calls for counter-cyclical policies to boost demand. Experts feel that the fiscal deficit of 3.8% of GDP in FY20, and 3.5% in FY21.

“Investors stayed away from taking fresh positions ahead of the big event. The focus will turn to union budget as all eyes will be on how the centre is going to bring growth as any increase in spending would result in widening of fiscal deficit,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.

“Global economy is also on the edge with slow growth fears significantly high after the outbreak of the virus,” he said.

Top Nifty gainers: Bharti Airtel, IndusInd Bank, SBI, and Kotak Bank

Top Nifty losers: Coal India, Power Grid, Tata Motors, ONGC

Stocks & Sectors:

Sectorally, the S&P BSE Oil & Gas index was down 2.6%, followed by the S&P BSE Energy index that fell 2.3%, and the Metal index was down 2.32 percent.

On the upside, the S&P BSE Telecom index rose 1.2 percent, followed by the S&P BSE Realty index that was up 1.09 percent, and the S&P BSE Consumer Durables index gained 1.08 percent.

Volume spike was seen in Coal India, BEL, and NTPC

Long Buildup – Century Textiles, Jubilant FoodWorks, DLF

Short Buildup – BEL, OIL, Coal India, Power Grid, ONGC

As many as 60 stocks on the BSE hit their fresh 52-week high that includes names like Dixon Technologies, SRF, Avenue Supermarts, Jubilant FoodWorks, PI Industries, etc. among others.

Stocks in news:

Kotak Bank advances nearly 4% as promoter share sale overhang ends

SBI moves 2.5% higher after reporting a strong set of earnings in Q3

Tech Mahindra gains nearly 2% from lows after solid topline beat

Wipro share price declined on January 31 after chief executive officer (CEO) and managing director (MD) of the company resigned.

Technical View:

Nifty formed a bearish candle on the daily charts. On the monthly charts, Nifty formed a bearish engulfing pattern on charts

Any disappointment from the budget event shall result in a major sell-off in next trading session which may force the indices to test its 200-Day moving averages whose value is placed around 11650 levels in the next trading session, suggest experts

Contrary, upside remains capped around 12272 for next session.

Traders are advised to remain neutral and buying on dips should also be avoided as technical outlook for the next couple of months is turning negative.

Three levels: 11945-11900, 12103, 12272Get access to India’s fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code “GETPRO”. Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.

  • Check out our Income Tax Calculator to find how Budget 2020 impacts your wallet
  • Click here for complete Budget 2020 coverage