Budget judgeit

It was an eventful week at the markets with the markets opening on a weak note and remaining so for the first three days Thursday January 31 which was expiry day saw markets making a massive up move This was followed by another up day on Friday February 1 when the Budget was announced BSESENSEX gained 44389 points or 123 to close at 3646943 points NIFTY gained 11315 points or 105 to close at 1089365 points BSE100 BSE200 and BSE500 were up 091 080 and 071 respectively BSEMIDCAP was down 028 while BSESMALLCAP lost 036The top sectoral gainer was BSEIT up 439 followed by BSETECK 428 and BSECON DUR 220 The top loser was BSEMETAL down 180 followed by BSEOILampGAS 095 In individual stocks the top gainer was ZEE Enterprises up 1163 followed by HCL Tech 752 and Axis Bank 719 The top loser was Vedanta down 1675 followed by Yes Bank 1548 Adani Ports 950 and India bull Housing 915Dow Jones gained 32669 points or 132 to close at 2506389 points The Indian rupee lost 6 paisa or 008 to close at R7124 to the US dollar January Nifty futures expired on a positive note and closed at 1083095 points a series gain of 5115 points or 047 This was an extremely choppy series and neither the bulls nor the bears were in control of the same The markets kept on oscillating in a broad 200 points positive and negative range with the bulls finally winning a closely fought seriesFiscal discipline maintainedThe Budget was presented on Friday and had enough for the vulnerable sections which were probably affected and were thus unhappy with the government The small farmer has been provided with an assistance of Rs 6000 the middle class with effectively a monthly salary of R60000 and investing the maximum amount of Rs 15 lakh under 80 C would pay no income tax Further the worker in the unorganised sector has been provided a pension of Rs 3000 per month post attaining the age of 60 years on payment of Rs 100 per month There has been some math used in managing the fiscal deficit even after providing Rs 75000 crore for the farmer scheme This money would come from a larger dividend from RBI and the expectation of better and buoyant tax collectionsThe market liked the budget because it did not go overboard on grants subsidies and doling out money to win votes It kept the fiscal discipline even though the elections would tempt to go full hog While the fiscal deficit could see some slipping it is still manageableThe week also saw the primary market issue from Chalet Hotels Limited open and close for subscription The company raised Rs 950 crore as a fresh issue and an offer for sale of 24685 crore shares in a price band of Rs 275280 The issue was exorbitantly priced and left nothing on the table for the investor This is confirmed by the poor subscription that the issue received Except the QIB portion which was subscribed 466 times HNI portion was subscribed 110 times and retail a mere 003 timesThis from an issue which the merchant bankers were confident would revive the primary market The biggest shocker was the fact that there were a mere 5250 applications received where based on the minimum application of 53 shares there should have been 391 lakh applications for the retail portion to be subscribed Very clearly the response was much below expectations and in no way has the revival of the primary market helpedSome key issues addressedThe week ahead sees RBI meeting for its bimonthly review meeting It is widely believed and expected that rates would be kept unchanged as with the government in election mode there could be a minor rise in inflation A possible rate cut is certainly ruled out and the possibility of a hike in these circumstances where inflation is under check is unlikelyThe budget is the kickoff to the elections to be held in AprilMay 2019 The ruling party has tabled a budget which they believe addresses the issues of the marginal farmer the middle class unorganised labourer amongst others There is only so much and no more that could be done in what is known as an interim budget Need for more or higher expectations can never be satisfied This budget has addressed some key and burning issues and probably that is why the opposition is criticising this budget so much Expect volatility with an upward bias to be the order of the day in the week aheadArun Kejriwal is founder of the Mumbaibased advisory firm Kejriwal Research amp Investment Services Pvt LtdDisclaimer No financial information whatsoever published anywhere in this newspaper should be construed as an offer to buy or sell securities or as advice to do so in any way whatsoever All matter published here is for educational and information purposes onlyCatch up on all the latest Mumbai news crime news current affairs and also a complete guide on Mumbai from food to things to do and events across the city here Also download the new midday Android and iOS apps to get latest updates