Domestic markets will be closely watched today as the Finance Minister Arun Jaitley will be announcing the Union Budget for 2017. 

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After the presentation of Economic Survey on Tuesday, the indices took a hit by closing nearly 1% down. Yesterday, Sensex closed at 27,655.96, down 193.60 points or 0.70%, while, Nifty ended at 8,561.30, down 71.45 points or 0.83%. 

What does history shows?

Past history suggests that 70% of the time budgets are in line with the underlying market moods, however during other 30% of time markets have turned due to budget events. 

On June 10, 2014, Sensex was trading at 25,583.69, which was a month before the presentation of Budget 2014-15. Just three days before the Budget, on July 7, Sensex had touched 26,100.08, for the first time in anticipation of strong reformatory budget from then new government. However, Sensex had dropped marginally on the day of Budget i.e. July 10, to, 25,372.75.

In 2015, Annual Budget was presented on February 28. Looking at the trend, though the during one month before the Budget was volatile, but, on January 23, Sensex had crossed a milestone of touching 29,000-mark for the first time. On that day it closed 29,272, again showing confidence in Modi government. 

After the budget announcement, in the early March, Sensex touched 30,000-mark for the first time cheering the buget policies. But, the domestic market's gains did not last much.

Jimeet Modi, CEO, SAMCO Securities, told Zeebiz, "There is currently fear in the market that benefits of long term gains will be reduced or taken away and therefore the markets would fall. But if we check history, it is surprising to note that,  markets had fallen 10% when long term gains tax was abolished, thus the current argument fall flat."

"Market’s budget reaction is a function of underlying trend, if the trend is bullish, the budget will be interpreted in a bullish perspective and vice versa for bearish phase.  Thus what really matters is to identify and follow the underlying mood of the market and ride the wave, rest everything else will fall in line," Modi added.

Stocks to look at

Shares of Eicher Motors, State Bank of Travancore, Tata Global Beverages, Apollo Tyres, Equitas Holdings and Shree Renuka Sugars will be in focus as these companies will be announcing financial result for the quarter ended on December 31.

According to Modi, sector -wise Housing Finance companies, Cigarettes, Two wheelers, PSU Banks, Infra and Cement space, will be closely watched. 

ONGC: The company on Tuesday reported  a net profit of Rs 4,352 crore, around 197% during the quarter ended on December 31, as against Rs 1,466 crore during the same period last year. 

InterGlobe Aviation: InterGlobe Aviation's (IndiGo Airline) net profit for its third quarter ended December 31, 2016 decreased 25% which stood at Rs 487.25 crore. Operating profit (EBITDA) stood at Rs 1460.54 crore, down by 12.89% versus Rs 1676.81 crore in Q3FY16. 

ICICI Bank: On Tuesday, ICICI Bank reported 19% drop in standalone net profit during the quarter ended on December 31. The bank registered a standalone net profit of Rs 2,442 crore as against Rs 3018.13 crore during the same period last year.