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Monthly Market Roundup Market Outlook: February
Indian equity markets The market participants cheered With the Budget blues behind us, the government’s
witnessed pre-budget rally the move of not tinkering with much applauded move to maintain fiscal prudence
in the month of January securities transactions tax and despite increase in capital expenditure and reduction
owing to better than expected maintaining status quo on capital of government borrowings should set a positive
corporate earnings and gains tax. undertone for the domestic markets and bring FII
short covering of positions. inflows. Higher allocation towards farmers, rural
The budget was eyed by A new ETF with diversified population, youth should boost consumption and
all as it had raised huge CPSE stocks will be on revive the demonetized economy. All eyes will now be
expectations to cool down offering in 2017-18. Further, glued at RBI’s monetary policy which will be unveiled
the effects of demonetization shares of Railway PSEs like on Feb 8, 2017 and upcoming state elections.
and was presented before IRCTC, IRFC and IRCON will On the global front, European Central Bank (ECB)
the upcoming state elections. be listed in stock exchanges. meeting minutes, Bank of England’s (BOE) monetary
Further, it was a historic policy and US FOMC meeting minutes will be major
budget with the first of its Railway budget cheered events to watch for. Political climate in developed
kind step by the Government up everyone with the countries that are moving towards protectionism
of merging railway and removal of service charges may impact global trade and hence export related
general budget in 93 years. on bookings made through sectors should be viewed with caution. Though
IRCTC which indicates Indian markets cannot be seen in insolation in light
Finance Minister, Mr Arun government’s focus to of global uncertainties, yet they are better placed than
Jaitley delivered rural improve digital transactions. other emerging market peers. Hence, we recommend
centric budget and chose The announcement for investors to invest in stocks with strong fundamentals
to stick on the path of fiscal railways mainly focused on for long term perspective.
consolidation. The budget was four themes; safety, capital
mainly focused on farmers by and development focus, Nifty Technical Outlook: February
aiming to double their income financial accounting reforms
in five years and several and Swachhh railways. Nifty
other agricultural sector
developments. Affordable The month finally ended with On the monthly chart, we are observing that the
housing has been given downward bias as S&P BSE preceding up move has taken support at the 50%
infrastructure status that will Sensex delivered positive Fibonacci retracement levels and has formed a
improve progress in the real return of 3.87% to settle at bull candle. This clearly suggests that monthly
estate sector and boost the 27655.96 and Nifty 50 gained bias has turned positive and momentum on the
mission “Housing for All by 4.59% ending the month at upside is likely to continue. In the coming month
2022”. Reduction in tax rates 8561.30. if Nifty trades and closes above 8664 level then it
for individuals in tax slab of is likely to test 8822 – 8979 – 9162 levels. However,
Rs 2.5-5 lakhs from 10% to On the institutional side, if Nifty trades and closes below 8457 level then it
5% and for corporates with foreign institutional investors can test 8300 – 8143 – 7960 levels.
annual turnover upto Rs 50 (FIIs) sold Rs 1,176.60 crore Since, the monthly bias has turned positive we
crores to 25% will improve worth of equities during expect momentum on the upside to continue and
sentiments. Fiscal deficit of the month while domestic Nifty may test the above mentioned resistance
3.2% was in line with market mutual fund houses continued levels. Further, stock specific activity viz. in the
expectations. their buying spree with net midcap and small-caps is likely to continue.
purchases of Rs 5,233.90 crore
in January 2017. 3 ARIHANT CAPITAL ¡ FEBRUARY 2017
