Nifty hovers below 17,550; India VIX falls 5.11% to 20.83

Indices traded with strong gains amid the ongoing Union Budget announcements by Finance Minister. The Nifty scaled below the 17,550 level.

At 12:34 IST, the barometer index, the S&P BSE Sensex, jumped 700.87 points or 1.21% at 58,715.27. The Nifty 50 index advanced 210.45 points or 1.21% at 17,550.90.

In the broader market, the S&P BSE Mid-Cap index added 0.43% while the S&P BSE Small-Cap index gained 0.42%.

The market breadth was strong. On the BSE, 1,659 shares rose and 1573 shares fell. A total of 118 shares were unchanged.

The yield on 10-year benchmark federal paper surged to 6.799% as compared with 6.684% at close in the previous trading session.

Derivatives:

The NSE`s India VIX, a gauge of market`s expectation of volatility over the near term, fell 5.11% to 20.83. The Nifty 24 February 2022 futures were trading at 17,593, at a premium of 20 points as compared with the spot at 17,573.

The Nifty option chain for 24 February 2022 expiry showed maximum Call OI of 21.2 lakh contracts at the 18,000 strike price. Maximum Put OI of 39.5 lakh contracts was seen at 16,500 strike price.

Buzzing Segment:

Power stocks edged higher after the Union Finance Minister Nirmala Sitharaman announced allocation for hydro and solar projects in FY23.

"Rs 1,400 crore will be allocated for 123 MW hydro & 27 MW solar projects in FY23," the Finance Minister said.

Adani Green Energy (up 3.54%), Adani Power (up 2.78%), Tata Power (up 2.28%), NTPC (up 1.16%), Jaiprakash Power (up 0.55%) and NHPC (up 0.33%) gained in trade.

Nazara Technologies jumped 4.49%. after the Union Finance Minister Nirmala Sitharaman announced plans to set up Animation, Visual Effects, Gaming, and Comics (AVGC) promotion task force. �Animation, Visual Effects, Gaming, and Comics (AVGC) promotion task force will be set up to build domestic capacity to serve our markets and global demand,� the Finance Minister said.

Union Budget 2022:

The government has set fiscal deficit target at 6.4% for FY23. FY23 total expenditure is seen at Rs 39.45 lakh crore. Total receipts other than borrowing seen at Rs 22.84 lakh crore.

Surcharge on cooperative societies will be reduced from 12% to 7%, FM said. Alternate Minimum Tax for cooperative societies to be cut to 15%. Proposal will reduce surcharge on cooperative societies to 7%, for those whose income is between Rs 1 crore and Rs 10 crore.

To provide an opportunity to correct an error, taxpayers can now file an updated return within 2 years from the relevant assessment year.

Both Centre and States govt employees` tax deduction limit to be increased from 10% to 14% to help the social security benefits of state govt employees and bring them at par with the Central govt employees, FM said.

Digital rupee using blockchain and other technologies will be issued by RBI starting 2022-23. This will give a big boost to the economy, Nirmala Sitharaman said.

Meanwhile, FM said that any income from transfer of any virtual digital asset shall be taxed at the rate of 30%. No deduction in respect of any expenditure or allowance shall be allowed while computing such income, except cost of acquisition. 1% TDS will be levied on payments made on transfer of digital assets.

FM said customs duty on cut & polished diamonds, gems to be reduced to 5%.

FM announced that the Ujjwala scheme, aimed at providing clean cooking fuel to poor households through LPG connections, would be extended to a further one crore households.

Data centres and energy storage systems to be included in harmonised list of infrastructure sectors. This will include dense charging infra and grid scale systems.

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