Nifty has short term target of 5602 and 5647 - Alex Mathews

It was trade well done for everyone today. For Nifty it was over 200 points jump with the index closing above 5500 levels. Budget announcement was the major trigger for the market and it brought in huge short covering. It was centered on investment in infrastructure, agriculture, education and financial sector which was cheered by the market men today even though some of the sectors like IT, Oil, aviation, hotel etc didn't find place in the budget. Major beneficiaries were Infrastructure, banking, agriculture, education, healthcare, automobiles etc. One of the notable steps was to allow the FIIs to invest in SEBI registered mutual funds if the FIIs met the KYC requirements for equity schemes. The government has even taken bold steps and signed around 500 TIES (Tax Information Exchange Agreements) with countries around the world. Direct tax exemption limit was enhanced from Rs 160000 to Rs 180000 incurring a net revenue loss of Rs 11500 crore will have a null effect on such a hike in personal tax exemption limit taking into account the net revenue gain of Rs 11300 crore from increased indirect tax collection. Also around 130 more items were brought under the tax net.

Nifty has short term target of 5602 and 5647 (200 DMA) while the support is there at 5476 and 5455 levels. Nifty must consolidate above 5500 for a movement towards 5647 levels. Oil prices have eased a bit but regional uprising seen in Oman which supplies around 1% of global oil is a concern. But assurance from Saudi Arabia to make good any supply disruption may keep the price cooled atleast for sometime.

During the day we saw the country's trade data which showed the exports in January rising an annual 32.4% to $20.6 billion while imports for the month rose 13.1% on the year to $28.6 billion. On the other hand the HSBC Markit Purchasing Managers' Index rose to 57.9 in February from 56.8 in January. These positive economic data were more than enough for the upward trending market to continue showing gizmos. The US index futures too were trading positive during the day extending further support. Even though tomorrow being a holiday on account of Mahashivratri, investors remained invested showing their confidence in the markets.

Automobile companies rallied today on better February sales report which was out during the day showing decent numbers which further supported the uptrend in the sector. Power sector shares were in demand today as tax exemption under 80-1A for power generation companies was extended by one more year for one more year and also exemption was given for ultra mega power plants from excise duty in the Union Budget. Education stock remained attractive as before.

In the global arena also the trend was positive with the Asian markets rising on falling oil price and rising US personal income. In the European front the markets were in green as German unemployment change declined to 52000 from 18000 previously and the German Manufacturing PMI rose to 62.7 against 62.6. Later in the day we are expecting the US ISM manufacturing Index and the US vehicle sales.

Source : Equity Bulls

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