Nifty likely to remain volatile
Budget Expectations by Mr. Rohit Gadia [Founder & CEO, CapitalVia Global Research] “Tax – We are expecting the exemption limit in the income tax slab to go up from the current level of 2.5 to 3 lakh, which directly leave more money in the hands of general public to greater purchasing capacity. Infra - Infrastructure is undoubtedly the foremost sector to be watched since there are plenty of opportunities to be available to grab for the companies as well as the lenders. Infrastructure development is a pre requisite for the growth and development of any country. This sector is also correlated with other important sectors of an economy like steel and cement companies stand to gain from the rapid infrastructure development. Similarly, financial institutions lending for the infrastructure also stand to gain. Long term infrastructure bonds (Section 80CCF) - This section of the act provides deduction to an individual or HUF in respect of subscription towards long term infrastructure bonds to the extent of Rs. 20,000. In the budget for the year 2015-16, this limit is expected to be extended till Rs.50, 000 to promote the investment in the infrastructure sector. MAT on Infrastructure companies -Government has offered various tax incentive under section 80-IA of the act to the infrastructure companies to boost the infrastructure, but the benefit available to the infra companies under the normal provision of the act get neutralized since the companies are required to pay MAT on their book profit, and to attract more and more investment in infrastructure sector, MAT on infrastructure companies should be abolished.”By Mr. Vivek Gupta [CMT – Director Research, CapitalVia Global Research] Mumbai: Nifty Future for the week began on a subdued note and slipped into the red from the higher levels amid intense volatility was seen during the week, hitting its lowest closing level in more than two weeks led by mid-cap and small cap index falling more the benchmark index decline, disappointing third quarter numbers by PSU banks like PNB, Union bank, IOB and Tata Motors. The market breadth indicating the overall health of the market was weak. In the overseas markets, European stocks edged lower after the European Central Bank fueled an increasingly tense standoff between the Greek government and its international creditors by declaring it would stop accepting Greek bonds as collateral for central bank loans. Asian stocks edged lower after the European Central Bank (ECB) on 4 February 2015 abruptly pulled back its soft treatment of Greek debt and cancelled its acceptance of the country's bonds in return for funding. Movement of index in near term will be consistently remains on further reform initiatives to be taken by the government and depend on upcoming CPI and IIP numbers scheduled next week on 12th February and also Q3 results of large cap companies like SBI, BPCL, M&M, CIPLA, BHEL, CADILA HEALTHCARE etc. Nifty February Future gave closing at 8716 with the weekly loss of 156.60 points. In near term Nifty likely to remain volatile but is expected to correct a bit more till 8500 levels before it resumes its uptrend having resistance around the levels of 8840 on the upside while having important support around the levels of 8500. This budget is going to be the budget of expectations and the plans for the implementations of the new initiatives taken by the govt. As Prime Minister Shri Narendra Modi appears to be taking calculated measures towards his vision of ‘Shresht Bharat’, in the same trend now this time Union Minister Shri Arun Jaitley will be in focus that how he present his plans to boost the economic growth and to narrow down the fiscal deficit.