@AlliesFin
FPI buying was just Rs 35 crs whereas DII bought Rs 3000 crs yesterday which is below normal then why did market perk so much...? As reported earlier that only after 2010 for the first time FPI were short in excess of 1 lac contracts of Nifty. And whenever this was seen in the past market has run big and effect were clearly seen for next 3 to 4 months. Yesterday's first cut was short covering by the FPI. Even before NIRMALA SITARMAN started to speak Sensex was up 700 points which could mean the tax proposal were leaked few minutes before FM spoke.
The delivery volumes in 14 frontline stocks on FRIDAY were as under...
HDFC ltd 65% 2,400 Cr
HDFC bank 46% 1,200 Cr
Kotak Bank 45% 490 Cr
Bajaj finance 25% 515 Cr
Bajaj finserv 21% 150 Cr
HDFC life 61% 300 Cr
HUL 60% 525 Cr
Asian Paints 47% 300 Cr
Marico 56% 52 Cr
Dabur 53% 125 Cr
Nestle 52% 198 Cr
Pidilite 52% 109 Cr
Titan 32% 300 Cr
Britannia 36% 140 Cr
The aggregate buying was Rs 6804 crs which is almost 120 pc higher than FPI DII buying. This also means the influence on market is also from some quarters which are neither DII nor FPI.
The PMEAC Chairman has today gone on record that the 5% GDP in Q1 is reflection of volatility. He says India is on 6.5 pc growth trajectory. Whatever is the reason I believe that Govt has much more data which we do not possess and the claim of the Govt 6 to 6.5% could see the light of the day.
Such bold measures ( 3rd Budget of the year ) cannot be prepared and announced within 76 days of the first Budget this could lead to logical conclusion that Mr Narendra Modi had prepared plans well in advance to bring India more competitive in the world. There is better understanding with TRUMP who had already asked the US companies to move out of CHINA and move elsewhere. If not CHINA THIALAND which cut tax rate to 17% could have been another alternative but Narendra Modi had different idea altogether.
May we Howdy Modi is ready to see joint announcement for INDIA as next investment destinations. Many US co's may announce plans to invest in INDIA with sizable size. This will be a plan to ignite manufacturing base and create employment in INDIA.
Now be prepared for big tax cuts for individuals through DTC before or Budget 2020. This is to bring the tax rate below the corporate tax rates to spur investments. Finally Govt is realising that GST is on revenue whereas Tax is on income hence even if some revenue is forgone this will offset in higher GST if economy turns.
Post 1991 this is single largest response from any Govt in INDIA. This Govt therefore proved that it possess power and guts to announce mega decisions and bold reforms. Kashmir ARTICLE 370, triple talaq and tax cuts will be always known for Narendra Modi in the history of Indian economy. Land reforms and labour reforms are expected very soon. This is must to induce the MNC to come to INDIA else these tax measures may not yield big results.
Therefore going by the stream of events, I believe the next 5 months will remain action packed for INDIA before next Budget. The only negative is slippage of fiscal deficit and experts project at 4 pc instead of 3.4 pc budgeted but I have reasons to believe that this Govt will contain it below 3.6 to 3.7 pc which is acceptable given the big tax cuts. Un long term the revival of economy, disinvestment plan could try to match the shortfalls and the market borrowing may not be that bad sabotaged as expected by the bond market.
The EPS upgrade is estimated by almost 18% across the board and with the consolidated Nifty PE has jumped from 18 to 19 in just 1 day. However with the news EPS growth the 19 PE is fairly underpriced and first target of Nifty resurfaces to 13000 ( 22 PE ) and as expected by PMEAC if GDP bounce back to even 6 pc in Q2 Q3 market will be on fire for short covering as well fresh buying. MIDCAPS and SMALLCAPS will become potential multi baggers.
In CHEMICAL and API sectors 80 pc capacities are getting shut in CHINA and many have started move out. Many may come to INDIA very fast. The existing players in
By: via @AlliesFin Serve T.ME/ALLiESFiN
