- The Nifty gained by 179 points and the Sensex gained over 665 points on a day when the Fed kept the rates at 2.25% to 2.50% and also focused on the word patience with respect to future rate hikes, giving a dovish picture.
- The big news on Friday will be the Union Budget which is expected to focus a lot more on rural spending power. This is likely to be positive for stocks like Britannia and HUVR that have been expanding their rural footprint rapidly.
- FIIs were net buyers to the tune of Rs.3006 crores while DFIs sold Rs.(-1634) crore on Thursday. A chunk of this are appears to be institutional placements while arbitrage positions have also pushed up the volumes.
- The rally in the US markets continued for the second consecutive day as an outcome of the Fed policy stance. Asia has been largely muted as has been the SGX Nifty. A lot will predicate on the financials presented in the Interim Budget.
- We stay negative on Zee Entertainment and ICICI Bank with downside targets of another 15% downsides from current levels. We expect that NPA pressures at ICICI and business pressures on Zee will continued to weigh.
- One outcome of the Union Budget appears to be a boost to rural spending and probably Universal Basic Income. This is likely to be positive for stocks like Hindustan Unilever and Britannia in terms of a huge entry level demand.
- We expect Tata Steel to bottom around the current levels as the Chinese stimulus that is proposed to boost growth is expected to help all metal companies. Target a price of Rs.550 on Tata Steel in one quarter.
- While the Fed status quo has been positive, a budget that does not stretch the fisc too much will be a good starting point for the markets.
