While presenting the budget for FY2014-15 (vote on account-interim budget), the last of the United Progressive Alliance-II government, the finance minister tried to manage market expectations relating to the containment of the twin deficits and the goal of a higher growth (6% for FY2015). The tweaking of the indirect tax rates in favor of some sectors like automobiles (auto), fast moving consumer goods (FMCG) and capital goods could be seen as a last ditch attempt to address the concerns that have been triggered by the economy's slowdown. Though the budget has set a tall target for growth and deficits, but it has failed to touch the problems of several other sectors and the structural problems on both the revenue and expenditure fronts. Within its constraints, the interim budget does touch upon some issues but going ahead, the market's focus will shift to the other events, mainly the general election and global cues.
Highlights of interim budget.
· The gross domestic product (GDP) growth is estimated at 4.9% for FY2014 which implies a growth of at least 5.2% for Q3 and Q4 of FY2014.
· The fiscal deficit (FD) is estimated at 4.6% for FY2014 (vs the budgeted target of 4.8%) and is pegged at 4.1% (Rs5.24 lakh crore) for FY2014. The FD target for FY2017 is 3% of the GDP.
· The revenue deficit is estimated at 3% for FY2015 vs 3.3% in FY2014. The government expects a 19% growth in its tax revenues and Rs56,900 crore from divestment proceeds (vs Rs25,800 crore in FY2014).
· For FY2014 the current account deficit is estimated at $45 billion, which is significantly lower than $88 billion in FY2013.
· The planned expenditure for FY2015 has been maintained at FY2014 levels while the non-planned expenditure has been pegged slightly higher at Rs12.08 lakh for FY2015.
· The gross borrowings of the government are pegged at Rs5.97 lakh crore (lower than the expectations of Rs6.25 lakh crore), which is slightly higher than the revised figure of Rs5.63 lakh crore in FY2014. However, the net borrowings are pegged at lower than the FY2014 figure of Rs4.57 lakh crore.
· It envisages capital infusion of Rs11,300 crore (vs Rs14,000 crore in FY2014) in the public sector banks (PSBs).
(Source:- Some leading brokerage houses reports)
Nifty future closed 6098 on 17th Feb 2014 up by 40 point. Yesterday Nifty future made a high 6099 and low of 6045. SGX nifty down by 4 points at 6093. American market closed yesterday on account of “president day”. European market closed mixed and Asian trading mixed or flat to negative. Yesterday nifty future could not cross resistance of 6100.
NIFTY INTRADAY SCIENTIFIC CHART 18'th Feb 2014
(Expected to happen during market timing)
Today we expect nifty to take support around 6045,6070 at lower level and resistance around 6120,6135. We have slow positive trend. Today we may see choppy trend in market. We all now have resistance zones like 6100,6120,6135 so it’s slow positive trend. As written earlier in weekly outlook reliance is not showing strength in market. Banknifty will also see positive trend. We see positive closing in nifty future between 15 to 25 points on closing basis. We are stuck in range that is a problem for traders not finding volatility or clear volume with follow up.
Thanks & Regards
Nishant Jani
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