In an interview with ETMarkets, Nigam said: “The Budget is predicted to significantly increase capital investment since the government is confident that the robust tax receipts in 2022–2023 will be able to cover the higher spending,” Edited excerpts:
Based on the December series expiry and rollover position for the January series – where do you see Nifty50 hovering in the new series?
The December expiry was slightly negative for traders as the market started on a positive note and made a record high of 18,998 but ended on the lower side at 18,192 levels.
(Tax breaks, jobs or plan to beat China: What will Budget 2023 offer? Click to know)The significant rollover was visible for the January series. Around 79.2% of contracts were rolled over in January expiry on the last day.
Based on the rollover data, Nifty may stay on the positive side. For January Expiry, important levels to watch for are 18500 on the higher side whereas 17600 can act as support on the lower side.
What is fueling a rally in the metal space?
In the past week, the Nifty metal index rallied 7.95% as against the 1.68% rally in the Nifty50 Index, being the top-performing index as well as a major contributor to fueling the rally in markets.
So, the leaders in the large-cap space are taking charge or the ones that have been a bit of an underperformer are managing to show signs of strength yet again.
This is a strong sign of a new bull market or a new uptrend beginning in a space.
This rally is majorly due to the reports that Indian steel mills are eyeing price hikes in January on the back of improved global cues and the firming up of international prices.
Moreover, there has been strong demand for precious metals in recent days due to a sharp drop in the dollar index. Also, the recent removal of export duty on steel has renewed interest in steel stocks.
Further, metal companies are in focus due to their monthly production performance. Metal stocks have seen a good rally, and the outlook remains strong for the near future.
How should one play the small & midcap theme in January?
The Nifty Small Cap Index was up by about 5.98% in the last week of the year coupled with a 4.48% gain in the Nifty Mid Cap index. However, Nifty 50 closed with a gain of 1.68% in the week gone by.
The rally was witnessed in many mid-cap and small-cap fertiliser names, and this can be ascertained to be a pre-budget rally. Some Railway and Infra names also saw major gains in the last week.
Investors can look to add select small and mid-cap stocks in January, in spaces that shall benefit from the budget.
To name a few sectors, we believe that the Union Budget will focus largely on manufacturing, clean energy and healthcare spaces, hence, these themes can see some steam in January.
What are the expectations from the investors’ community from the finance minister for Budget 2023?
The Budget is predicted to significantly increase capital investment since the government is confident that the robust tax receipts in 2022–2023 will be able to cover the higher spending.
Investors and taxpayers both want additional tax benefits and lower tax rates. The government may raise the income tax exemption level from the current Rs 2.5 lakh in the budget.
If this endeavour is effective, customers may have greater disposable cash and investment may be encouraged. The current tax structure for diverse assets is a complex web, with numerous rates and unique rules for various asset types.
The tax rates vary depending on the business, and in order for India to be a hub for both manufacturing and services, corporations want the tax rates to be uniform across all industries.
In addition to boosting the manufacturing and industrial sectors, this will open the door for the services sector to expand and outperform itself.
Your 3-5 trading ideas for the January series?
Here are a few trading ideas for the January series –
Radico Khaitan: Buy| Target Rs 1200| Stop Loss Rs 930
The stock has given a strong reversal from the recent breakout zone and is currently trading near its support zone. Hence, we recommend buying the stock for the target of 1200 and can maintain stop loss of 930.
Dr. Lal PathLabs: Buy| Target Rs 2800| Stop Loss Rs 2100
Diagnostic stocks were in the corrective mode for quite some months now but in recent trading sessions, the stock has been consolidating near its support zone.
Therefore, we advise the investors to make a fresh entry with a target of 2800 and can maintain a stop loss of 2100.
Fiem Industries: Buy| Target Rs 2100| Stop Loss Rs 1575
FIEM is one of the leading manufacturers of automotive lighting, signalling equipment, rear-view mirrors, and sheet metal and plastic parts.
The company’s share price reversed from recent highs and is currently trading near the 1700 level. We recommend buying the stock at the current price with a target of 2100 and stop loss of 1575.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)