Market rallies ahead of interim budget, Nifty ends above 21,700

In a resilient display, the domestic equity benchmarks concluded Wednesday`s trading session with robust gains, fueled by the anticipation surrounding India`s interim budget for 2024 and the impending outcome of the US Federal Reserve meeting. The Nifty50, which experienced an initial dip to 21,448.85, rebounded to surpass the 21,700 level by the day`s end. On the sectoral front, healthcare and realty shares surged, while oil & gas and IT shares lagged. The midcap and smallcap indices outperformed the benchmarks, underscoring a positive market build-up.

The barometer index, the S&P BSE Sensex jumped 612.21 points or 0.86% to 71,752.11. The Nifty 50 index added 203.60 points or 0.95% to 21,725.70.

Tata Motors (up 2.90%), Reliance Industries (up 1.36%) and HDFC Bank (up 1.25%) boosted the indices.

Finance Minister Nirmala Sitharaman is set to present her sixth Budget, an interim one, on Thursday amid the ongoing Budget session of the Parliament. Although Sitharaman has indicated that the interim Budget will not include any "spectacular" announcements, there is widespread anticipation for positive developments. Traders are expressing optimism regarding a potential reduction in the fiscal deficit, underpinned by robust tax revenues. This positive outlook is contributing to an overall sense of buoyancy in the market.

In the broader market, the S&P BSE Mid-Cap index added 1.57% and the S&P BSE Small-Cap index rose 1.83%.

The market breadth was strong. On the BSE, 2411 shares rose and 1411 shares fell. A total of 92 shares were unchanged.

The NSE`s India VIX, a gauge of market`s expectation of volatility over the near term, shed 0.34% to 16.05.

Economy:

Indian Central government`s fiscal deficit expanded to Rs 9.82 lakh crore in April-December from Rs 9.07 lakh crore in April-November. This figure represents 55.0% of the full-year target of Rs 17.87 lakh crore. The fiscal deficit for April-December 2022 accounted for 59.8% of the target for 2022-23.

Growth in India is projected to remain strong at 6.5% in both 2024 and 2025, the International Monetary Fund said on Tuesday. The report pegged global growth at 3.1% in 2024 and 3.2% in 2025. Growth in China is projected at 4.6% in 2024 and 4.1% in 2025, with an upward revision of 0.4% points for 2024 since the October 2023 World Economic Outlook, the IMF said, adding that in the US, growth is likely to fall from 2.5% in 2023 to 2.1% in 2024 and 1.7% in 2025. China and India account for most of the upward revision. In China, growth was supported by higher spending on disaster reconstruction and resilience projects. In India, strong domestic demand underpinned another increase in our growth estimate, the Fund noted.

Numbers to Track:

The yield on India`s 10-year benchmark federal paper dropped 0.14% to 7.145 as compared with previous close 7.155.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 83.1150, compared with its close of 83.1000 during the previous trading session.

MCX Gold futures for 5 February 2024 settlement added 0.27% to Rs 62,800.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, gained 0.18% to 103.59.

The United States 10-year bond yield slipped 0.77% to 4.026.

In the commodities market, Brent crude for March 2024 settlement shed 88 cents or 1.06% to $81.99 a barrel.

Global Markets:

European stocks showed modest gains, while Asian stocks exhibited a mixed performance on Wednesday as investors awaited the U.S. Federal Reserve`s rate decision and evaluated economic data.

China`s factory activity declined for the fourth consecutive month in January, although the official non-manufacturing managers` index increased to 50.7 from 50.4 in December.

In the US, stocks closed with varied results on Tuesday in anticipation of the Federal Reserve`s policy outcome.

The International Monetary Fund (IMF) slightly raised its global growth forecast for 2024, observing reduced risk of a hard landing but highlighting geopolitical conflicts as potential global growth constraints. Additionally, the IMF increased its 2024-25 GDP growth estimate for India by 20 basis points to 6.5%.

New listing:

Shares of Nova Agritech were ended at Rs 58.79 on the BSE, representing a premium of 43.39% as compared with the issue price of Rs 41.

The scrip was listed at Rs 56, exhibiting a premium of 36.59% to the issue price. The stock has hit a high of 58.79 and a low of 55. On the BSE, over 15.58 lakh shares of the company were ended in the counter.

Stocks in Spotlight:

PB Fintech (Policybazaar) soared 12.47% to Rs 1,025.25 after the company reported consolidated net profit of Rs 37.22 crore in Q3 FY24 compared with a net loss of Rs 87.62 crore recorded in Q3 FY23. Revenue from operations jumped 42.74% year on year (YoY) to Rs 870.89 crore in the quarter ended 31 December 2023. The company said that it sourced Rs 4,261 crore insurance premium, having an annualised run rate (ARR) of Rs 17,000 crore in Q3 FY24 marking a 41% growth YoY. New protection business (health + term insurance) increased 44% in Q3 FY24.

Dr Reddy`s Laboratories jumped 4.72% after the drug major`s consolidated net profit increased 10.57% to Rs 1,378.9 crore on 6.57% rise in revenues to Rs 7,214.8 crore in Q3 FY24 over Q3 FY23.

Sun Pharmaceutical Industries advanced 3.42% to Rs 1,418.50 after the drug major�s consolidated net profit grew 16.52% to Rs 2,523.8 crore on 9.52% rise in revenue from operations to Rs 12,156.86 crore in Q3 FY24 over Q3 FY23.

Piramal Pharma rallied 3.74% after the company reported a consolidated net profit of Rs 10.11 crore in Q3 FY24 as compared to a net loss of Rs 90.18 crore posted in Q3 FY23. Revenue from operations grew by 14.14% year on year to Rs 1,958.57 crore during the quarter, on the back of double digit growth across all the three businesses.

Tata Consultancy Services (TCS) rose 0.41%. The company announced a 15-year expansion of its partnership with Aviva, the UK�s leading Insurance, Wealth and Retirement provider, to transform Aviva�s UK Life business and enhance customer experience leveraging the TCS BaNCS based platform. As part of this, the end-to-end policy administration and servicing will expand to cover over 5.5 million policies, to be managed by Diligenta, TCS� FCA regulated subsidiary in the UK, on behalf of Aviva.

Voltas jumped 7.81% after the company�s net loss narrowed to Rs 28 crore in Q3 FY24 from Rs 110 crore in Q3 FY23. Consolidated total income for the quarter ended 31st December, 2023 was higher by 32% at Rs.2684 crores as compared to Rs. 2036 crores in the corresponding quarter last year.

KEC International jumped 4.67% after the company reported a consolidated net profit of Rs 97 crore in Q3 FY24, which is significantly higher as compared with a PAT of Rs 18 crore recorded in Q3 FY23. Revenues rose by 14% year-over-year (YoY) to Rs 5,007 crore during the period under review.

VIP Industries declined 1.07%. The luggage manufacturer�s consolidated net profit dropped 83.79% to Rs 7.15 crore in Q3 FY24 as compared with Rs 44.10 crore recorded in Q3 FY23.

SRF rallied 4.54%. The specialty chemical maker`s consolidated net profit slipped 50.4% to Rs 253.43 crore on 12% decline in revenue from operations to Rs 3,053.04 crore in Q3 FY24 over Q3 FY23.

KPI Green Energy hit an upper circuit of 10% after the company�s wholly owned subsidiary KPIG Energia Private Limited received a new domestic order for a 5 MW solar plant under the captive power producer segment from Skywin Paper Industries.

IPO Update:

The initial public offer (IPO) of BLS E-Services received bids for 58,56,83,352 shares as against 1,37,02,904 shares on offer, according to stock exchange data at 17:00 IST on Wednesday (31 January 2024). The issue was subscribed 42.74 times.

The issue opened for bidding on Tuesday (30 January 2024) and it will close on Thursday (1 February 2024). The price band of the IPO is fixed at Rs 129-135 per share. An investor can bid for a minimum of 108 equity shares and in multiples thereof.

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