Fiscal Deficit target revised to 4.9% of GDP for FY25- Daily Market update-24 July 2024 | Globe Capital Market LTD.
24-Jul-2024
Fiscal Deficit target revised to 4.9% of GDP for FY25- Daily Market update-24 July 2024

The union government will target a fiscal deficit of 4.9% of the gross domestic product for FY25, compared to a target of 5.1% set in the interim budget, Finance Minister Nirmala Sitharaman announced in her budget speech on Tuesday. For FY24 too, the fiscal deficit has been revised to 5.6% of the GDP.

Overview and Outlook

Global Stock Market Today

  • US equity markets settled on a flat note.
  • Barring DAX, other European equity markets settled on a negative note.
  • Asian equity markets are trading in red.
  • GIFT Nifty is down by 80 points, Nifty futures likely to open around 24400 levels (as on 8:20AM).

 

News highlights from across the globe

  • Asia-Pacific markets are trading lower taking cues from the overnight move on Wall Street as earnings from Magnificent Seven technology company disappoints.
  • US stocks faced resistance in gaining momentum as traders sifted through a flood of corporate results to gauge the market’s ability to sustain this year’s historic rally.
  • Brent crude up 0.43% at $81.36 per barrel.

 

Important news updates from the domestic front

  • Bajaj Finance Q1 FY25 (Consolidated, YoY) – Net profit up 13.82% at Rs 3,912 crore versus Rs 3,437 crore. Total income up 28.8% at Rs 16,102 crore versus Rs 12,500 crore.
  • HUL Q1 FY 25 (Consolidated, YoY) – Revenue up 1.4% at Rs 15,707 crore versus Rs 15,496 crore. Ebitda up 2.2% at Rs 3,744 crore versus Rs 3,665 crore. Ebitda margin at 23.8% versus 23.7%. Net profit up 2.2% at Rs 2,612 crore versus Rs 2,556 crore.
  • Infosys has signed a contract with UVC Partners to co-create next-generation solutions using AI and deep technology.
  • Suven Pharmaceuticals received an observation letter with ‘no adverse observations’ from BSE and ‘no observations’ from NSE. Observations are for a scheme of amalgamation seeking the amalgamation of Cohance Lifesciences with the company.
  • IOL Chemicals And Pharmaceuticals: EDQM issued a certificate of suitability for Valsartan tablets. Valsartan is used to treat high blood pressure.
  • Titagarh Rail Systems begins the export of traction converters with the first shipment to Italy.
  • Shilpa Medicare’s unit manufacturing facility in Karnataka received GMP certification from COFEPRIS- Mexico. The inspection was conducted from Nov. 6 to Nov. 10, 2023.
  • MIC Electronics: Kalidindi Satyanarayana Raju resigned as CEO effective July 10 and appointed Rakshit Mathur as CEO effective Aug 1. The company also appointed Vivek Reddy Venumuddala as COO with immediate effect.
  • South Indian Bank is to consider fundraising on July 30.

 

Nifty Overview & Outlook

The Nifty benchmark index started positively in anticipation of the Union Budget announcement. However, it plummeted during Finance Minister Nirmala Sitharaman’s speech when she announced hikes in Short-Term Capital Gains (STCG) and Long-Term Capital Gains (LTCG) taxes, alongside Securities Transaction Tax (STT) on derivatives. However, Nifty recovered sharply and ended the session nearly unchanged after slightly positive adjustments to income tax slabs, a revised fiscal deficit target, and increased focus on rural economic growth. Ultimately, Nifty closed 0.1% lower, while the Bank Nifty underperformed, declining nearly 1%.

The broader markets also lagged behind the benchmark, with the Midcap and Smallcap indices ending 0.7% and 1.1% lower, respectively. The Nifty FMCG index surged the most by 2.7% due to focus on rural development in Budget. Nifty Media followed with a gain of 1.2%, whereas Nifty Realty was the biggest loser, falling 2.3%. Most other sectoral indices mirrored this decline resulting in an overall negative market breadth, with 201 stocks advancing and 297 declining.

From a technical standpoint, Nifty experienced significant volatility during the eventful day. It corrected near a critical support level of 24140 before rebounding to close nearly flat amid short covering. Looking ahead, if Nifty continues its rebound, immediate resistances are seen at 24560 and 24690. However, considering a broader perspective, Nifty shows signs of forming a Head & Shoulders pattern, suggesting potential retracement and formation of a right shoulder around a neckline of 24140. We hold support levels at 24330 and 24140, below which we may see a substantial decline.

 

Derivatives Overview & Outlook

Yesterday, Nifty and Finifty futures shed 3.7% and 1.8% of open interest respectively as long unwinding whereas no significant change was seen in Banknifty futures on open interest front.

Nifty and Banknifty futures have rolled 30% & 29% of open interest each into next contracts so far.

On options front, put writing along with call writing was seen at multiple strikes and maximum positions are at 24000 PE closely followed by 24500 PE and 25000 CE closely followed by 24500 CE.

 

Institutional Trading Activity

Yesterday, FIIs sold stocks worth Rs 2975 Cr in the cash segment, sold stocks futures worth Rs 6174 Cr and also sold index futures worth Rs 3660 Cr. DIIs were net buyer in the cash segment to the tune of Rs 1419 Cr.

 

Nifty Futures, Banknifty Futures and Finnifty Key Levels

Nifty – Resistances 24600-24720; Supports 24200-24080

Banknifty – Resistances 52000-52250; Supports 51500-51200

Finnifty – Resistances 23500-23600; Supports 23200-21500

 

Security in Ban Today: GNFC, INDIACEM, SAIL.

 

Imporatnt Results Today: AXISBANK, BAJAJFINSV, BAJAJHLDNG, CGPOWER, FEDERALBNK , IEX, IGL, KPITTECH, LT.

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