Eye on Union Budget, F&O expiry and GDP - Consortium

After a sharp decline yesterday, the market today witnessed a firm bounce back. Nifty gained by 35.55 (up 0.62%) points to close at 5796.90. Government has announced reforms based Rail Budget and expectation of better union budget is anticipated today.

Asian stocks outside Japan gained after U.S. housing and consumer confidence data beat estimates. European stocks advanced as the euro strengthened from a seven week low. Italy plans to sell bonds after the nation's borrowing costs surged yesterday. Moreover Economy survey predicated India Economy to grow 6.1 - 6.7%.

There was short covering in Realty, Banking, Oil & Gas and Metal stocks. Telecom stocks witnessed smart rally ahead of better earnings growth. Bharti has gained by 3% to close at Rs 321. Profit booking was seen in few Tech stocks. Capital Goods stocks witnessed fresh buying. L&T surged by 3.5% to close at Rs1415 after the company bagged large order worth Rs15.05bn. Both NTPC and BHEL gained modestly. FMCG stocks gained after the media news that ITC raised Cigarette prices by 8-20% across brands just before the Budget.

Many mid-cap and small cap stocks like Core Projects, Opto Circuit, ABG Shipyard etc witnessed sharp intra-day decline today.Advances led declines 55 to 45.

For the day coming by, Indian markets is expected to open higher tracking positive global cues, while investors will keep a close eye on the much awaited Union Budget 2013 which will be presented in the Parliament later today. Investors will also eye GDP data for the December quarter which may be below 5%.

Volatility may remain high as traders roll over positions ad February 2013 F&O contracts also expire today. Nifty formed a Tweezer bottom on the daily chart at 5748 which can act as a temporary support. Crucial level for the day of event will be at 5748 and a breakdown below the same can accelerate the downtrend towards 5650. In the case of a pullback, supply can be expected at 5880- 5900.Today's being the budget day and the end of the accounting month, the market should see alternate bouts of buying and selling. The budget should give a big impulse either way, but, if the budget is lukewarm, the Nifty could resume its downward trend.

Source : Equity Bulls

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