Pre Open Thoughts: So Far So Good….

Pre Open Thoughts: So Far So Good….

Ø There is not any memory with less satisfaction than the memory of some temptation we resisted. So far so good. Big event is lined up for Today. The market is looking up to the Union Budget to not only give a fillip to the economy but also provide direction in the medium term.

Ø According to systems As long as the Nifty holds above 5390 levels the uptrend is not in any danger. A move past 5500 could accentuate the buying momentum.

Ø Back home politics has yet again triumphed over economics, a quiet opening is on the cards as most Asian peers seem to be taking a breather. US stocks advanced with the S&P 500 index hitting 1,400 for the first time since June 2008. European markets also closed mostly higher after the IMF approved a loan for Greece.

Ø We analyzed the stocks (CNX 100 ) performances during the budget period for last 7 budgets presented (including the interim one presented in 2009). We looked at performances one week before Budget, one day before Budget, one day after Budget and one week after Budget. .

Summary: Stock Specific: For Budget

Ø ALOK Industries : 7/7 times closed positive on day prior to budget but mostly (85% times) ended in red during the following week after budget.

Ø Dr. Reddy's : 7/7 times closed positive on day prior to budget but 5 out of 7 times closed negative on budget day.

Ø SUNTV & Dish TV: 80% of the times rallied one day prior to budget day, on budget day & post budget day.

Ø Maruti (MSIL): 6 out of 7 times had a positive day prior of budget in the range of 0.5% to 3.5%. Closed in green 5 / 7 times on budget day and one week after budget as well

Ø SAIL: 7 out of 7 times closed positive on day prior to budget

Ø Jain Irrigation (JI): 85% times was positive on day prior to budget but ALWAYS (100%) ended in red on budget day.

Ø BPCL/HPCL/IOCL: 75% of the times, stock of marketing companies BPCL HPCL IOCL have given negative return during entire budget period i.e. even considering week prior and post budget too.

Ø HUVR/ITC: closed positive 6 out 7 times on budget day

Ø Reliance Industries: mostly -ve return during budget days i.e. pre budget, post budget & Budget day.

Sector Specific

IT Stocks: Most of IT stocks close negative on Budget day. HCLT: rallied 85% of times on day prior to budget while always ended in red on budget day.

Metals: Apart from SESA mixed performance by SAIL/STLT/TATA/JSP.

Auto: Apart from the Maruti, rest were mixed.

Sugars Stocks: 75-80% of times negative on day prior to budget but also rally 75-80% of times on budget day.

Capital Goods: Prior to budget day and on budget day stock performed mixed (Larsen : 85% times positive on day after budget)