SENSEX SOARS 1,200 PTS; NIFTY TOPS 14,600 AS BUDGET EUPHORIA CONTINUES

Benchmark indices rallied for the second day on Tuesday, as investors cheered the Union Budget announcements. Positive global cues also lifted the sentiment. The Nifty managed to close near 14,650 level led by rally in banks and auto shares.

The barometer index, the S&P BSE Sensex, soared 1,197.11 points or 2.46% at 49,797.72. The Nifty 50 index surged 366.65 points or 2.57% at 14,647.85. Both the indices have surged about 7.5% in two sessions.

The broader market lagged the benchmarks. The BSE Mid-Cap index rose 2.26% and the BSE Small-Cap index gained 1.59%.

Buyers outpaced sellers. On the BSE, 1,755 shares rose and 1,184 shares fell. A total of 175 shares were unchanged.

The Union Budget 2021 unveiled on 1 February 2021 supported all the essential aspects of growth by an increase in government spending without an increase in indirect taxes. The Budget offered huge stimulus to infrastructure, capex, healthcare and boosted the credit flow by taking out the toxic assets of the banking system. Increased FDI limit in insurance improved the overall outlook of the sector.

Foreign portfolio investors (FPIs) bought shares worth Rs 1,494.23 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 90.46 crore in the Indian equity market on 1 February 2021, provisional data showed.

COVID-19:

Total COVID-19 confirmed cases worldwide stood at 10,34,18,646 with 22,38,286 deaths. India reported 1,63,353 active cases of COVID-19 infection and 1,54,486 deaths while 1,04,48,406 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.

Numbers to Watch:

The yield on 10-year benchmark federal paper rose to 6.132% as compared with 6.060% at close in the previous trading session.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 72.9650, compared with its close of 73.02 during the previous trading session.

In the commodities market, Brent crude for April 2021 settlement rose $1.13 at $57.48 a barrel. The contract rose $1.31, or 2.38% to settle at $56.35 a barrel in the previous trading session.

Foreign Markets:

Shares in Europe and Asia advanced on Tuesday. Globally, investors are keeping an eye out on further signs that economic recovery following the coronavirus pandemic is not too far away, as vaccination rollouts continue and new infections and fatalities start to slowly decline amid lockdowns.

In Asia, the Japanese government is set to extend the state of emergency covering Tokyo and other regions till March 7 in order to contain the coronavirus, as per media reports.

US stocks jumped on Monday, the first session of February, as Wall Street appeared to shake off concerns about a speculative retail trading mania that largely drove the market`s worst weekly sell-off since October.

Meanwhile, a group of 10 Republican senators sent President Joe Biden a letter on Sunday, urging him to consider a smaller, scaled-down COVID-19 relief proposal. His current plan calls for $1.9 trillion in additional fiscal stimulus.

The alternative proposal comes after House Speaker Nancy Pelosi said the chamber will move to pass a budget resolution, the first step toward approving legislation through reconciliation. The process would enable Senate Democrats to approve an aid measure without GOP votes.

In economic data, US manufacturing activity slowed slightly in January. The Institute for Supply Management (ISM) said on Monday its index of national factory activity fell to a reading of 58.7 last month from 60.5 in December.

New Listing:

Shares of Indigo Paints surged 19.60% to end at Rs 3118.65 on the BSE, closing at a premium of 109.31% over the initial public offer (IPO) price of Rs 1490.

The stock was listed at Rs 2607.50, at a premium of 75% or 1117.5 points to the IPO price. The stock hit a high of Rs 3129 and low of Rs 2428.20. On the BSE, 10.36 lakh shares were traded on the counter.

Buzzing Indian Segment:

The Nifty Bank index rose 3.56% to 34,267.90. The index has surged 13.15% in four sessions.

State Bank of India (up 6.66%), HDFC Bank (up 5.67%), Bandhan Bank (up 5.03%), Federal Bank (up 4.02%), Kotak Mahindra Bank (up 3.52%), IDFC First Bank (up 2.58%), ICICI Bank (up 2.43%), RBL Bank (up 2.17%), Axis Bank (up 1.29%), Bank of Baroda (up 1.08 %), Punjab National Bank (up 0.98%) and Indusind Bank (up 0.39%) advanced.

The Nifty Auto index climbed 4.01% to 10,638.60. The index has climbed 8.41% in two sessions.

Finance minister Nirmala Sitharaman announced in her Union Budget 2021 speech that the government intends to go ahead with a `Vehicle Scrappage Policy`. The new vehicle scrappage policy and its details will be shared with the public within the next 15 days. The policy will allow owners to scrap their 20-year old vehicles and avail incentives on the purchase of new personal vehicles. For commercial vehicles, the scrappage policy will be applicable for 15-year old commercial vehicles without a fitness certificate.

Tata Motors (up 16.93%), Ashok Leyland (up 9.46%), TVS Motor (up 7.85%), Maruti Suzuki India (up 3.53%) and M&M (up 3.13%) surged.

Hero MotoCorp fell 1.53%. The two wheeler maker sold 485,889 units of motorcycles and scooters in January 2021, lower than 501,622 units sold in January 2020.

Eicher Motors gained 2.18%. The company`s total Royal Enfield sales jumped 8% to 68,887 units in January 2021 from 63,520 units in January 2020.

Bajaj Auto rose 2.27% after the two-wheeler maker`s total sales rose 8% to 4,25,199 units in January 2021 from 3,94,473 units in January 2020.

Escorts surged 5.18% after the company`s consolidated net profit jumped by 85.1% to Rs 286.71 crore on a 23.8% rise in revenue from operations to Rs 2,042.23 crore in Q3 FY21 over Q3 FY20. Profit before tax in Q3 December 2020 stood at Rs 382.49 crore, up by 81.2% from Rs 211.12 crore in Q3 December 2019. Tractor volumes were up by 25.7% at 31,562 units in quarter ended December 2020 as against 25,109 units in the corresponding period last fiscal. Construction equipment sales volume for the quarter ended December 2020 were up by 20.1% at 1,254 machines as against 1,044 machines in corresponding period last fiscal.

Stocks in Focus:

HDFC rose 2.91%. The housing finance major`s standalone net profit tanked 65.05% to Rs 2,925.83 crore in Q3 December 2020 from Rs 8,372.49 crore in Q3 December 2019. Total income stood at Rs 11,716.34 crore in Q3 December 2020, dropping 42.25% from Rs 20,291.45 crore in Q3 December 2019. Profit before tax tumbled 58.95% to Rs 3,752.54 crore during the period under review. Total tax expense rose 7.29% to Rs 826.71 crore in Q3 FY21 over Q3 FY20. The result was announced during market hours today, 2 February 2020.

Dixon Technologies (India) rose 3.59% after the company`s consolidated net profit jumped by 134.2% to Rs 61.59 crore on a 120% rise in revenue from operations to Rs 2,182.78 crore in Q3 FY21 over Q3 FY20. EBITDA jumped 89% to Rs 100.64 crore during the period under review. Profit before tax in Q3 December 2020 stood at Rs 81.68 crore, up by 130.3% from Rs 35.46 crore in Q3 December 2019. Current tax outgo was higher by 129.9%, at Rs 20.46 crore in Q3 FY21 over Q3 FY20.

Meanwhile, the company`s board approved stock split in the ratio 1:5 (one equity share of Rs 10 to be split into five equity shares of face value Rs 2 each).

Coromandel International lost 4.92%. On a consolidated basis, the company reported 26.2% jump in net profit to Rs 333.80 crore on a 7.8% increase in net sales to Rs 3533.01 crore in Q3 FY21 over Q3 FY20. While the company`s total expenditure rose 6.6% to Rs 3033.75 crore, interest payments declined by 55.3% to Rs 20.54 crore in Q3 December 2020 over Q3 December 2019. Profit before tax in the third quarter was at Rs 446.87 crore, up by 26.1% from Rs 354.42 crore reported in the same period last year. EBITDA for the quarter ended Dec 2020 has grown by 16% to Rs. 501 crore as compared to Rs 432 crore during corresponding quarter of last year.

Castrol India rose 0.12%. The company reported 30.8% drop in net profit to Rs 187.70 crore on a 7.6% fall in net sales to Rs 935.20 crore in Q4 December 2020 over Q4 December 2019. Profit before tax in Q4 December 2020 stood at Rs 249.80 crore, down by 26.3% from Rs 338.80 crore in Q4 December 2019.

Central Depository Services (India) gained 3.41% after the company reported 66.3% rise in consolidated net profit to Rs 48.75 crore on 69.4% increase in net sales to Rs 89.20 crore in Q3 FY21 over Q3 FY20. Consolidated profit before tax rose 66.7% to Rs 63.71 crore in Q3 FY21 from Rs 38.22 crore in Q3 FY20. Tax expense were steeply higher at Rs 16.52 crore in Q3 FY21 from Rs 5.81 crore in Q3 FY20.

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