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At 9.17am, the benchmark BSE Sensex was at 40,623.45, down 0.66% or 190 points
At 9.17am, the benchmark BSE Sensex was at 40,623.45, down 0.66% or 190 points

Indian markets open lower; all eyes on Budget

Stock markets are open today for a special trading session due to the Budget

Indian equity markets on Saturday opened in the red, tracking overnight losses in global peers. Investors treaded cautiously ahead of the Union Budget 2020 to be presented at 11 am today. Finance Minister Nirmala Sitharaman, who will present the Budget, is expected to announce measures to revive the economy.

At 9.17am, the benchmark BSE Sensex was at 40,623.45, down 0.66% or 190 points, while the Nifty50 index fell 0.4% or 47.20 points to 11916.70.

Stock markets are open today for a special trading session due to the Budget.

Globally, rise in the number of coronavirus cases weighed on the US stocks, with Dow Jones plunging more than 600 points overnight. Investors have been increasingly worried over the impact of the deadly virus on global trade and economy, as the World Health Organisation (WHO) on Thursday declared the spread of the disease as a global health emergency.

The WHO’s decision comes amid signs that the spread of the pathogen cannot be abating. Confirmed cases in China jumped to 9,692, the National Health Commission reported Friday, up from about 7,700 a day earlier.

Analysts expect markets to be volatile, given muted global cues and ahead of the Budget, where fiscal deficit and government borrowing targets will be in focus.

"Markets will focus on the Budget as investors will watch out for steps that the Centre will take to bring growth, since any increase in spending would result in widening of fiscal deficit. Investors would also be cautious ahead of the auto monthly sales numbers, which would start coming from today. In addition to this, as the coronavirus spreads to other countries, fear is mounting which is dampening the global sentiments", said Siddhartha Khemka, head of retail research, Motilal Oswal Financial Services .

Analysts believe that the government is likely to miss its fiscal deficit targets for FY20 and FY21 by 30-50 basis points. Analysts also expect changes to the long-term capital gains tax, and scrapping of dividend distribution/ buyback taxes will be positive for the domestic equities.

The Economic Survey 2020, which was tabled in the Parliament on Friday, estimated GDP growth for the financial year ending March at 5%, the slowest since the global financial crisis of 2008-09. The survey projected economic growth at 6-6.5% in FY21, but warned the government may have to miss its fiscal deficit target to revive growth.

Hindustan Unilever Ltd gained 1.3%, after the company said it would increase prices of soaps by up to 6% in a phased manner to offset the rising cost of palm oil. The fast moving consumer goods company reported a profit of 1,616 crore for the December quarter, up 12% from a year ago.

Shares of ITC Ltd rose 0.7%, after the company recorded a massive 29.07% year-on-year growth in the third quarter of the current fiscal. The net profit during the quarter was at 4,141.90 crore, largely driven by lower tax cost, beating analysts’ expectations.

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