The benchmark indices ended virtually flat but the broad market gained. The BSEHEALTHCARE which has been under pressure for some time now made a new lifetime high. Stocks like Lupin and Sun Pharma made lifetime highs as well. The market is maturing and there is a certain amount of sector rotation happening. ITC was the top loser and there is a saying in the market that sell ITC before the budget and buy it on the day of the budget. Call it the scare of excise duty on cigarettes or the EL NINO one, FMCG was down and under pressure.
Decisions or events during the previous week include the rollback of suburban fares to the 14.2% hike of other passenger fares and the decision to defer gas price hike by three months. The excise duty cuts or benefits to stimulate the economy passed in the interim budget were extended by six months upto December 2014. In important events the judgement in the case of insider trading involving Reliance is to be delivered on Monday by SAT. The company is in the news for reasons right or wrong.
The budget is a mere nine trading sessions away and it would probably be one which could make or break the markets. The PM has his focus on growth development and job creation and his FM would and should deliver to his commitment. The ambiguity of the previous Government and its Finance ministers with the words “RETROSPECTIVE” and “GAAR” would certainly be done away with. It’s high time with transparency and SEBI introducing a new simple class of investor known as the Foreign Portfolio investor, the government come down and clear the issue of P Notes as well. There could be a fall out when this issue is tackled but its imperative that the face behind the name is made available transparently.
Markets are concerned about the lack of rain or delayed monsoon so far and its implications on inflation. Nothing is insurmountable if there is a desire to control it. The country has adequate food stocks in godowns and warehouses which are not only overflowing but also rotting. The proper channelizing of these resources is required and the willpower to do so is the key.
Markets will remain buoyant and expectations are building up. The market expects its normal wish list of change in slabs of income tax, higher allowances and deductions. It also expects that to boost the investments and capital formation 80C limit or deductions under ELSS will be increased. Well what will happen and what not is just nine trading session away. Hold your horses till then.
One final piece of advice, buy fundamentally sound companies only and just avoid those dime a dozen tips that come on your cellphone by way of unwanted and unwarranted SMS’s.