Weekly Market Update: Range bound week for NIFTY and Sensex

Date: 12/1/2019

Short Market Update: Nifty and Sensex saw a range-bound week, interim budget on Feb 1st, New changes to GST exemption limit, India retained its place as the fastest growing country, SEBI’s cyber attack on AMC’s.

The Nifty started the week with three consecutive gain days but ended with two red days. On Friday, markets ended lower, with BSE Sensex down 96.66 points or 0.27% and closed at Rs 36,009.84, and NSE Nifty down 26.60 points or 0.25% at Rs 10,795.00. Midcap down by 19.37 points or 0.13% and closed at Rs 15,177.03. And, Small Cap up 27.87 points or 0.19% and ended at Rs 14,600.37.

Positive global cues such as easing US-China tensions and supporting comments from the US Federal Reserve Chief Jerome Powell led to this week’s market sentiment. However, the rally was limited, as investor’s exercised caution amid the corporate earnings season. Selling pressure in shares of oil & gas and metal firms chipped off some gains from the market.

This week, Sensex rose by 314.74 points or 0.88% and closed at Rs 36,009.84, while Nifty was up 67.65 points or 0.63%, and closed at Rs 10,794.95.

The rupee depreciated 1.10% (Rs 0.70) against the dollar during the week.

Interim Budget on February 1st, 2019

The budget session in Parliament will start from 31st January 2019 and will last till 13th February. The interim budget is likely to be given by Arun Jaitley on 1st February. The full budget will come only when the new government is formed. However, this interim budget is very important for the Modi government ahead of the general election.

GST exemption limit doubled

GST council approved some measures that will benefit the small businesses and one of them is doubling of the GST exemption. The 20 lakh threshold has been doubled to Rs 40 lakh. The exemption limit for registration and payment of GST has been raised for the supplier of goods but states would have the flexibility to decide on one rate in a week. For service providers, it will stay at Rs 10 lakhs. These changes will come into action from April 1st 2019.

India’s GDP expected to grow at 7.3% in 2018-19

The World Bank has forecast that India will grow at 7.3% for the fiscal year 2018-19 and 7.5% for the next two years. This growth rate is attributed to an increase in consumption and investment. India retained its position as the fastest growing economy in the world. China’s growth rate is projected to slow down to 6.2% in 2019 and 2020 and 6% in 2021 according to the World Bank.

SEBI’s cyber-attack on AMC’s and mutual funds

SEBI has placed stricter norms of cybersecurity framework for mutual funds and AMCs to guard against data leaks. The new norms will be effective from April 1st 2019. Any quarterly reports containing information on cyber-attacks and threats experienced by mutual funds and AMCs and measures to mitigate vulnerabilities, threats and attacks and any information related to bugs etc have to be submitted to SEBI in a soft copy. As increasing use of technology and technological developments in securities markets have led to a need of strong cybersecurity to protect the integrity of data and protect it against breach of privacy.

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