Daily Markets - Feb 1, 2021 - Mr. Deepak Jasani, Head of Retail Research, HDFC Securities

Indian benchmark equity indices broke the six day losing streak as markets cheered the Union Budget 2021 presented by the FM in Loksabha on Feb 01 even as she spelt out the Modi government's plan for economic recovery. At close, the Nifty was up 646.60 points or 4.74% at 14281.20. The Sensex registered the best Budget day gains since 1997.

Volumes on the NSE were expectedly high on the Budget day. Except pharma, other sectoral indices ended with a gain of 1-8 percent. Broad market indices - BSE Midcap and Smallcap rose 2-3 percent. Markets felt that the Banks, Infrastructure, Materials and Metals sector could be benefitted by the privatization and spending thrust in the Union Budget.

Asian stock markets gained Monday after coronavirus vaccine maker AstraZeneca agreed to increase supplies to Europe amid rising worries about the disease. European stocks advanced on Monday, echoing positive market sentiment elsewhere.

India's manufacturing industry started the year 2021 on a strong note with Manufacturing Purchasing Managers Index (PMI) for the month of January at 57.7, reflecting the strongest improvement in three months. Manufacturing PMI in December 2020 and November 2020 came in at 56.4 and 56.3, respectively.

Nifty has reversed the latest downtrend swiftly due to the Budget provisions. Reaction of the FPIs to the Budget provisions will be keenly watched and if they don't seem to mind the large absolute fiscal deficit numbers, large Govt borrowing numbers and delay in achieving the 3% fiscal deficit targets, this upward momentum can continue. 14378-14471 could be the next band of resistance for the Nifty and in case this is breached a move towards the earlier high of 14754 can be seen.

Source : Equity Bulls

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