Expiry of the February derivatives series, the Budget session of
Parliament and the tone of the Railway Budget will set the trend for
equities next week. The underlying bias will remain positive in the run-up
to the Union Budget for 2016-17 (Apr-Mar), particularly as market
participants keenly watch the Budget session, which starts Tuesday, for
the passage of the Goods and Services Tax Bill.
Apart from GST, the passage of the Bankruptcy Code and Rail Regulator
Bill may be a positive surprise for the market. The last few sessions were
complete washouts and meaningful action in Parliament could be a
welcome surprise for the markets.
Thursday, the Railway Budget and the expiry of the February futures and
options series will be in focus. Expiry of the current derivatives series is
expected to keep action volatile, particularly on Thursday, as positions
would be rolled over to the March derivatives series for the Budget.
Even though the impact of the Railway Budget is seen largely limited to
stocks of companies linked to railway sector. The Union Budget, to be
detailed on Feb 29, is expected to focus on fiscal consolidation, spending
on infrastructure, rural India, and reforms for public sector banks.
For the week ahead, Nifty 50 is seen rising up to 7350-7400 points,
implying an upside of 2-3% from current levels. This week, indices have
ended with over 3% gains each.
Nifty 50 ended at 7210.75, up 19.00 points or 0.3% from the
previous close, while Sensex ended at 23709.15, up 59.93 points or 0.2%
from Thursday. The India VIX or volatility index ended down 2.6% at
20.9150.
Short covering ahead of the Union Budget later in the month helped
indices recoup intraday losses, to end marginally in the green.
Open interest in Nifty 50 February fell nearly 5% to 20.55 mln, and the
contract ended at a premium of 1.7 points to the spot index, as compared
to a discount in the previous session
( www.rupeedesk.in )
