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When Finance Minister announced her intentions of presenting a budget for 2021 which was going to be the most extraordinary budget in the last 100 years, there were only a handful of people who believed her. But we at Shyam Advisory believed in her. And on Monday as she presented her budget speech, an anticipating Indian market cheered along with the entire nation.
Probably for the first time, on a budget day, the indices did not turn red and they kept on marching upwards and onwards. As markets closed with 4.5% positive, investors and optimists cheered for the Indian Economy outlook. Amid all that is unfolding, Shyam Advisory brings to you an outlook for the Indian stock market in February 2021. At the end of this post, we will update you with favorable stock tips and Nifty Option Tips that can give you handsome rewards in the short run.
As anticipated in our last post, we anticipated that Finance Minister might go all guns blazing with multiple demand-side measures. We hoped that her primary focus was going to be job creation and reviving the economy through fiscal stimulus. Her fiscal measures included the highest ever capital expenditure in Indian Economic History. Along with multiple asset monetization and management schemes, FM also announced a 2.5 lakh crore healthcare budget. Through newly announced PM Atmanirbhar Swasth Bharat Yojana, she aims to improve Primary, Secondary, and Tertiary Healthcare.
In the economic survey for 2021, it was projected that the economy needs a countercyclical fiscal policy. The Finance Ministry clearly went ahead with that recommendation. This slew of measures has pushed the fiscal deficit target for FY22 to a whopping 6.8%. In the wake of Covid 19, the revised Fiscal Deficit shot up to 9.5%, more than doubling from a target of 3.5 in FY21.
For those of you unaware of what Fiscal Deficit means, it is simply the difference between net expenditure and net earnings of government while excluding loans. An expansionary fiscal policy means that the government is spending more. This usually has tons of positive impacts on the economy and share market. In the wake of these events, profitable stock tips with Shyam Advisory can help you in big gains.
If you are new to the markets then you might end up believing that every budget brings out a similar rally in the market. However, that is as far from the truth as it can be. During the budget session and especially on the budget day itself, the market dives steeply. But this was not to be in 2021. The mega rally of Monday made Nifty Puts worthless as those who believed in Finance Minister’s words made huge gains.
The only thing market was demanding from FM was growth and with a grand fiscal stimulus, Ms. Nirmala Sithraman delivered. Even though the newly announced capital expenditure is still only a fraction of GDP, the government has clearly rejected the mentality of Fiscal Restraints and capping the deficit at 3.5%.
With the privatization of IDBI bank, the government has clearly shown that it intends to get rid of the NPA issue and is looking for making the banking sector profitable. Not only will this improve credit flow but also lead to a revival of economic growth. This will push banks with great fundamentals upwards. SBI, HDFC, and ICICI bank clearly remain favorable stock tips and banknifty tips for coming days.
With the mega rally of Monday, Nifty erased all the losses of the past week and regained the levels of 14250. The market sentiments are likely to remain positive in the coming week and the key resistance levels for markets are placed at 14530 and 14770. On daily charts, it has formed a long bullish candle, giving hope of resuming the rally of 2021. Regarding Nifty Option Tips, readers can go long for the 14,500 strike price. If the momentum reversal occurs in the coming days, the key support level is placed at 13,800.
Stock Option Tips: Investors have shown a keen interest in Aarti Industries, Hindustan Uniliver, and Colgate. All the 3 stocks have seen a high delivery percentage with an increase in Open Interest. These 3 stocks are likely to remain in action throughout the week. Apart from this, bulls seem to have returned to Reliance Industries as the futures prices were up by 2.7% and the stocks saw a significantly high delivery percentage too.
Bank Nifty Tips: Nifty bank surged by nearly 8.5% to touch mount 33,000 on Monday. The important support levels are placed at 31,560 while the major resistance levels are 33,960 and 34,830. IndusInd bank was up by nearly 15%, showing a strong reversal from the previous week and clearly being a winner in the banking sector. It is likely to remain a favorable stock tip for the coming days.
Because of the recent turn of events, where a group of investors connected through the social media website called Reddit, Silver has clearly become the centerpiece of the action. If you are unaware of what has transpired between Reddit, Melvin Capital, and Citron Research group, then here is a little bit of backgrounder.
Active Hedge Funds like Melvin Capital have shorted 140% shares of a gaming outlet company called Gamestop in the US Market. This infuriated a group of investors on Reddit and they went on a metaphorical war against Hedge funds. As a result of this ‘Short Squeeze’, Melvin has lost nearly 2.3 billion. It was then the rumors started to spread that just like Gamestop, the prices of silver have been artificially suppressed. This caused an upheaval in the silver prices and the commodity was up by 6%. Though it is highly unlikely that silver prices will soar in a manner similar to Gamestop, which rallied nearly 30 times, the commodity is clearly going to remain in action.
MCX Tips: Regarding budget, there was no change proposed in Commodity Transaction Tax but there were a few tweaks in Customs duty. The effectively reduced tax on the import of Gold and Silver might result in increased demand and hence an upward movement in the prices. Even though Copper scrap dut has been reduced, MCX copper prices are likely to remain unchanged.
Agri Commodity Tip: The import duty on cotton was increased to 10% from the present value if 0%. However, there was no change in import duty on Soybean oil and Sunflower Oil. Investors can buy these commodities on dips. However, the exact impact of the proposals remains unclear.
With the budget of 2021, the markets have seen the best budget day in nearly 25 years. Bulls have clearly returned back to the market with their hands firmly placed on the driving seat. The market sentiment turned highly positive and it is likely to remain so.
In light of these events, favorable stock tips from Shyam Advisory can help you in gaining wealth in stock markets. We also update our customers and readers with regular Currency tips, Crude oil tips, and NCEDX tips. If you are a serious investor or someone looking to start in the Indian Stock Market, then Shyam Advisory can help you with profitable stock tips, Nifty option tips, and other share market tips.
A note of caution: Share Markets are volatile and unpredictable. Readers are advised to follow caution while investing and trading