Budget buzz, HDFC twins lift stock markets
By S Jha
New Delhi, January 17: Foreign institutional investors finally bought into the Indian equity on Tuesday with a net buy of Rs 211 crores, as Dalal Street buzzed with Budget speculations of the government exploring possibility to reducing direct taxes. Direct Tax Code (DTC) has so far been untouched by the Narendra Modi-led NDA government.
Indices shrugged off indecisiveness in the late hours on Tuesday, as HDFC twins gave leadership to the stock markets, which had gained strength from the IT companies. Also, there were suggestions in some quarters that the Reserve Bank of India may finally pause the rate hike next month, which again lifted the indices.
Nifty, which had been struggling to hold on to gains, finally went passed the psychological barrier of 18000 to close at 18053. The Bank Nifty was a laggard on Tuesday, but HDFC Bank dragged the index to the green territory. The HDFC merger theme is yet to play out on the constituent stocks. But HDFC Bank and HDFC showed strength on the bourses. It has been seen that whenever the twins gain strength, the indices go soaring, as was the case on Tuesday.
The IT stocks, which have received positive commentary on the back of their third quarter results and also on the basis of inflation peaking in the US, gained pace, with the likes of HCL technology, TCS and Infosys gaining further strength. For past three trading sessions, the IT stocks are showing marginal strength.
Larsen and Toubro, the construction behemoth, was the star of the day, sprinting to a gain of over three per cent. The scrip, which is in a diversified business, including defence goods production, is yet to break out of the short trading range.
Dalal Street was abuzz with speculations that Finance Minister Nirmala Sitharaman may finally bite the bullet and reduce the direct taxes in the higher slabs, which could bring more money in the hands of the upper middle class to boost the consumption in the economy. However, such speculations are norms in the run up to the presentation of the Union Budget, which is slated for February 1. The lack of strength in Bank Nifty may remain a cause of concern for the investors, since the banking stocks had been the equity market leaders in the last year, while no other sector has shown consistent strength.
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