Markets may edge higher; Axis Bank, ITC in focus

Axis Bank, Yes Bank may extend gains on fungibility of FPI and FII while ITC may extend losses on excise duty hike

Markets are set to extend gains on Monday after the Union Budget tabled by Finance Minister Arun Jaitley reduced corporate tax and announced a timeline to implement the General Sales Tax. The Budget laid thrust on infrastructure growth and also reduce the fiscal deficit to 3% in three years.

Foreign institutional investors were net buyers to the tune of Rs 614 crore on Budget day.

In Asia, stock in China were trading higher amid volatile trade after the central bank lowered interest rate on Saturday. Gains were led by rate sensitive sectors such as banks and real estate among others. However, profit taking at higher levels capped upside gains. Shares in Hong Kong were also trading marginally higher in line with the trend in the mainland. Shares in Japan touched fresh 15-year high after rate cut by China and weakness in the yen. Exporter shares such as Toyota Motor Corp and Honda Motor Co were trading firm.

Meanwhile, US markets ended lower on Friday amid weak consumer sentiment in Friday. The index on consumer sentiment declined to 95.4 compared with 98.1 in January according to a release by the University of Michigan. The Dow Jones ended down 0.4% at 18,132.70, the broader S&P 500 ended down 0.3% at 2,104.50 and the tech laden Nasdaq ended down 0.5% at 4,963.53.


Stocks in focus

ITC may extend losses after the finance minister proposed to some changes in excise duty on cigarettes. Excise duty on cigarettes is hiked by 25% for cigarettes of length not exceeding 65 mm and by 15% for cigarettes of other lengths. Similar increases are proposed on cigars, cheroots and cigarillos.

Shares of private banks such as Axis Bank, Yes Bank, Kotak Mahindra Bank, IndusInd Bank are likely to edge higher after the Budget proposal would favour select private sector lenders who will now be able to raise additional money from foreign institutional investors.

Oil marketing companies such as IOC, BPCL, HPCL may gain after hike in petrol and diesel prices by over Rs 3/litre.

Footwear makers Liberty Shoes, Bata India, Relaxo Footwears may extend gains after the finance minister Arun Jaitely proposed to reduce excise duty on leather footwear to 6%.

Eicher Motors will gain after the company today reported strong sales of Enfield for February 2015.

MCX may extend gains after the finance minister Arun Jaitely proposed to merge commodity market regulator Forward Markets Commission (FMC) with capital markets regulator Securities and Exchange Board of India (Sebi).

Airline shares may weaken on the back of rise in aviation turbine fuel prices.