Tit - bits

Yesterday, (Wednesday) the Indian markets were

Photo: Moneycontrol.com

totally under the control of the bulls.  The BSE Sensex closed at 41,565.90 up 349.76 points (+0.85%), while the Nifty ended at 12,201.20 up 93.30 points (+0.77%). 

However, the market breadth was in favour of bears, indicating caution ahead of IIP and CPI data announced later in the day (Wednesday).

The retail inflation in January rose to 7.59% against 7.35% in December, while industrial output contracted 0.30% in December, against a growth of 1.80% in November. This means, the unrealistic run which is continuing in some of the FMCG counters at ridiculous P/Es, is likely to end soon. And money, from these over valued FMCG stocks would soon enter,  the other beaten down counters from sundry sectors. 

#Now coming back to the budget once again, we saw fiscal stimulus to our economy in the form of  allocating more funds towards rural India, reducing taxes, and abolishing Dividend Distribution Tax (DDT) to boost growth.

Against the backdrop of stagnating Agri income and rural demand shrinkage, the government has provided Rs.1.3 lakh crore for agriculture and farmers’ welfare, which includes an allocation of Rs.615 bn to rural employment scheme (NREGS), of Rs.195 bn to rural roads (PMGSY) and Rs.275 bn towards rural housing (PMAY-G). 

Moreover, while the NDA government has elevated the Food subsidy budget for FY21 by 6%, the Fertilizer subsidy budget for FY21 has been reduced by 11%, which is likely to cause some working capital stress for fertiliser companies; as the NDA government never delivers the subsidy on time to the fertilizer companies, adding to the problems. Besides,  the price of urea has not been raised since more than a decade,  compounding the owes of the fertiliser manufacturers. 

Anyway,  the sectors which are likely to a get positive effect due to government's rural push are: tractors and other Agri equipments, agrochemicals, NBFCs and FMCG companies focussed more on the rural space, select consumer discretionary companies having a rural presence, home appliances, and consumer durables.

This year’s superb Rabi output coupled with good farm prices should help improve rural income and boost rural consumption; kicking up the overall GDP.  I'm positive on the markets in the short term. However,  having said that, I feel there are chances that, spiking up of inflation and a shrinking IIP could spoil the Bull party.

#Yesterday, the stock of HSIL (Rs.58.15), which was recommended in this blog, around a couple of days back at around Rs.53, made an intraday high of Rs.58.60. You can book some profits, and hold the rest with a SL at Rs.57.

#Yesterday,  I bought two shares for my portfolio investors. One of them is one of my old favorites, P C Jewelers Ltd, which touched Rs.21.45 intraday on Wednesday, before closing at Rs.20.95, up 17.04%. The name of the other share will also be disclosed soon in this blog.

#In another development, I have decided to manage those Demat accounts of investors/traders, which have a portfolio size of more than Rs.5 (five) lakhs. 
From, Saturday, this week I will discontinue the earlier Rs.3/5 Lakh profit sharing scheme; as I'm unable to look after too many of them, at the same time. However,  existing ones will be there.. It is regarding fresh offer from clients.
Also,  those investors who are ready to take a little risk in exchange of good future returns, should send me mails. Others, can either try on their own or look for bank FDs. Those are not willing to risk capital erosion of their portfolios in case of a mishap, should invest only in debt schemes -- equity is not for them. The profit sharing ratio is 70:30 in general casis,  between you and me. 

#Two BTST shares recommended to the Premium members were:

1. BTST - Buy Adani Enterprise Ltd at around  Rs.249.60, T: Rs.255 - 262, Rs. 244.70.
2. BTST - Buy IGL at Rs.521, T: Rs.528 - 537, SL: Rs.512.90.

#Today,  there is a report in ET,  that the beleaguered private sector bank, Yes Bank Ltd (Rs.35.20) which is engaged in fundraising exercise, said it has received non-binding expressions of interest (EOI) from investors including JC Flowers, Tilden Park Capital, OHA UK and Silver Point Capital.
So,  this could give rise to speculative buying in the scrip on Thursday, taking it near Rs.37. However,  if you know the art to swiftly enter and exit a countert, then only you can play; otherwise avoid. I caution you because we have seen such repeated announcements by now defunct, Reliance Communications Ltd (Re.0.70). 

#Yesterday, the capital goods giant BHEL broke the immediate support and made an intraday low of Rs.35.80 (52 - week low),  before closing at Rs.36.35, in the NSE; after it came out with a disappointing set of numbers for the December quarter. If you remember, I asked all to exit the scrip of Bharat Heavy Electricals Ltd,  when it hit the SL.