Nifty hovers around 8600 on caution ahead of Economic Survey


10:48 am Budget expectations: Sources say that the government is focusing on going pro-poor this time.

Indirect taxes are not likely to be tinkered much with as Finance Minister Arun Jaitley’s focus continues to be the upcoming Goods & Services Tax (GST).

Government sources, privy to the developments, say that higher allocation for social sectors is likely in this Budget. Areas like irrigation and rural infrastructure will be focused upon.

10:39 am Crude falls further: Oil prices dipped as rising US drilling activity offset efforts by OPEC and other producers to cut output in a move to prop up the market.

Brent crude futures, the international benchmark for oil prices, were trading at USD 55.10 per barrel, down 0.24 percent from their last close.

Since their January peak, Brent has lost over 5.5 percent in value.

10:30 am Earnings estimates: Country’s largest private sector lender ICICI Bank is expected to see earnings pressure in Q3 owing to elevated slippages and higher provisions. Profit is seen falling 27.8 percent year-on-year to Rs 2,180.2 crore in the quarter ended December 2016.

Net interest income, the difference between interest earned and interest expended, may decline 1.7 percent to Rs 5,359.1 crore compared with Rs 5,453 crore in year-ago period.

Analysts expect slippages to remain on the higher end between Rs 7,000-8,000 crore (against Rs 8,029 crore in Q2).

10:20 am ONGC gets 1st installment from Venezuela co: India’s ONGC has received the first installment of USD 19 million from Venezuela’s state oil firm Petroleos de Venezuela towards recovering pending dividend , a senior company official said.

PDVSA and ONGC Videsh Ltd, the overseas investment of arm of state-run explorer ONGC, last year signed a deal allowing the Indian firm to get 17,000 barrels per day of oil to recover dues of about USD 540 million.

“PDVSA is marketing our share of oil. Every month we will get an installment,” N. K. Verma, managing director of ONGC Videsh told Reuters late on Monday. He said price of crude from San Cristobal project is market linked.

ONGC has 40 percent stake in the project with PDVSA holding the remainder. ONGC has invested USD 200 million in the San Cristobal field and has not received any dividend since 2009.

10:10 am FII View: Nigel Tupper of Bank of America Merrill Lynch says history suggests Asia tends to be one of the best performing regions in the world when the Global Wave is rising.

Asia has not outperformed global equity indices in the recent rally, but there are a number of positive catalysts for Asia equities, he says.

The Global Wave has improved for the eighth consecutive month, the EPS forecast of Asia has been positively correlated to the Global Wave since 1988, and Asia is trading below long-term average valuation levels relative to other regions of the world, Tupper feels.

10:00 am Market Check

Equity benchmarks as well as broader markets remained under pressure as investors maintained cautious stance ahead of Economic Survey and Union Budget.

The 30-share BSE Sensex was down 90.93 points at 27758.63 and the 50-share NSE Nifty fell 29.75 points to 8603. The broader markets also slipped 0.3 percent as about 1101 shares declined against 754 advancing shares on the exchange.

Finance Minister Arun Jaitley will table the Economic Survey in Parliament today. It is an official report on the economy and will set the tone for the Union Budget 2017-18, which will be presented on Wednesday.

As Jaitley readies to give a detailed account of prospects and the policy challenges, five things like demonetisation, GDP projections, universal basic income, black money and JAM (Jan Dhan, Aadhaar, Mobile) & BAPU (Biometrically Authenticated Physical Uptake) will be closely watched.

Technology and banking & financials stocks were under pressure while FMCG and oil stocks gained.

Ahead of quarterly earnings, ONGC gained 2 percent whereas Bajaj Auto, ICICI Bank and IOC were down 0.4-1.4 percent.