Weekly Market View – 5th February, 2022

Indian Market Outlook:

The Key benchmark indices rose over 2 percent during the week gone by led by the growth-oriented Budget. However, in the second half of the week, the market remained under pressure due to continued FII selling, rising bond yields & crude oil prices and weak PMI data. Nifty ended the week with 2.42 percent higher at 17516.3 points while the Sensex ended with 2.53 percent higher at 58,644.8 points. Broader market too rose over 2 percent during the week. BSE Midcap index ended 2.3 percent higher, while the BSE Small cap index rose 2.63 percent. Foreign Institutional Investors were the net sellers during the week; sell equities worth Rs. 7695 crores while the DIIs were the net buyers of Rs. 5924 crores. In Union Budget for 2022-23, FM presented a budget of Rs 39.45 lakh crore for FY23 which focused on infrastructure investment to boost revival from the pandemic. Going forward upcoming week is again going to be a busy week as RBI’s Monetary Policy Committee (MPC) will meet from next Monday and announce the policy decision on February 9, 2022 in the backdrop of a massive spike in bond yields post the Budget. Budget announced a record gross borrowing plan at Rs 14.95 lakh crore much higher than BofA estimates of Rs 13 lakh crore. Almost all major central banks are in the process of hiking rates to tame inflation. Apart from it Industrial Production of December month will be released with more corporate earnings coming next week. Besides this, developments in the Russo-Ukrainian crisis will also be key for the markets. We advise investors to invest in quality stocks with any further dip.

Latest Spot Price (in US $)

Source: Investing, NDTV, BSE, CNBCTV18, Moneycontrol,

Economic News:

• Direct tax collections are expected to breach the revised target of Rs 12.50 lakh crore and set an all-time high and “historic” record by the end of this financial year in March, CBDT Chairman J B Mohapatra has said. Multiple reasons like “easing” of tax compliance processes for taxpayers and enhanced ability of the taxman in data processing were cited by him for mopping up this high-volume of collections under two major heads — corporate tax and personal income tax.

• The 2022 Union Budget presented by the finance minister highlights the government’s intention to accelerate growth despite disruptions caused by the pandemic. The proposed hike in the capital expenditure by a sharp 34% to ₹7.5 lakh crore in 2022-23 clearly reflects the government’s priority to push for a speedy and sustainable economic development in the next few years. The significantly enhanced expenditure is expected to lead to a multiplier effect on the economy as private sector too ups the capital expenditure tempo as already seen in the last few months. 

• India’s unemployment rate witnessed a sharp decline to 6.57 per cent in January, the lowest since March 2021, as the country gradually recovers with easing of restrictions following a decline in Omicron cases, according to CMIE. While unemployment in urban India stood at 8.16 per cent in January, in rural areas it was the lowest at 5.84 per cent, as per data by independent think-tank Centre for Monitoring Indian Economy (CMIE).

Industry News:

• The government is expecting an investment of Rs 34,090 crore under the PLI scheme for large-scale electronics manufacturing, mainly mobile phones and electronic components, by 2025, Parliament was informed on Friday. The government has approved proposals of 20 companies under the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS), including that of Tata Electronics, till January 27.

• India’s 2021-22 progressive year-on-year sugar production till January 31 is higher by 5.6%, said industry body Indian Sugar Mills Association (ISMA). According to ISNA, as on 31st January, 2022, 507 sugar mills in the country were in operation and had produced 187.08 lac tons of sugar, as compared to 177.06 lac tons produced by 491 mills last season which operated on the corresponding date.

 Company News:

• State Bank of India Ltd., the country’s largest lender, saw its October-December quarter profit rise on lower provisions. Net profit for the quarter rose 62% year-on-year to Rs 8,432 crore. This compares with a Rs 8,259-crore estimate by analysts tracked by Bloomberg. Net interest income for the quarter rose by 6.5% from a year ago to Rs 30,687 crore. Other income for the quarter fell 6.2% to Rs 8,673 crore crore. Asset quality for the quarter improved as gross non-performing asset ratio fell by 40 basis points on a quarter-on-quarter to 4.5% as of December 31, 2021. Net NPA ratio too fell 18 basis points sequentially to 1.34%. Slippages during the quarter stood at Rs 2,334 crore, as compared to Rs 237 crore in Q3 FY21. On a sequential basis though, slippages fell 44%.

• Jio Platforms Ltd. has agreed to buy stake in Silicon Valley artificial intelligence startup Two Platforms Inc. as the Mukesh Ambani-controlled group continues to expand its digital business. Jio Platforms will invest $15 million in the startup for a 25% stake, the company said in a statement.

• Tata Steel Ltd.’s third-quarter profit declined but beat estimates sequentially even as coal costs rose. The steelmaker’s consolidated net profit slid 19.7% over the preceding quarter to Rs 9,572.6 crore in the three months ended December, according to an exchange filing. That compares with the Rs 9,017.7-crore consensus estimate of analysts tracked by Bloomberg. Net profit more than doubled over a year earlier.
• Godrej Properties Ltd. has decided to cancel the proposed deal with DB Realty Ltd. amid investor concerns, reflected in Friday’s stock plunge. The company received “substantial feedback and views” from its stakeholders and minority investors raising concern on the proposed transaction, Godrej Properties said in an exchange filing.

Global News

• Bank of England Chief Economist Huw Pill said U.K. interest rates will probably rise again in the coming months, although cautioned against expecting aggressive hikes. Speaking on Bloomberg TV the day after the BOE increased interest rates to 0.5% in its second successive hike, Pill said the bank as working to ensure that the U.K. didn’t suffer so-called second-round effects from high inflation.

• The U.S. labor market showed unexpected strength last month despite record Covid-19 infections, extending momentum into the new year as surging wages added more pressure on the Federal Reserve to raise interest rates. A broad-based 467,000 gain in nonfarm payrolls, which exceeded all economists’ projections, followed a 709,000 total upward revision to the prior two months.

(Source:Bloomberg Quint, Economic Times, BusinessToday,Business Standard, Financial Express,Investing, Moneycontrol, livemint)

Forthcoming Corporate Actions – 7^th February – 12^th February

Source: BSE, Elite wealth Research

Source: BSE, Elite wealth Research

Major Economy Indicators

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