Shares come off day's low

Benchmarks indices pared losses after hitting fresh intraday low in mid-afternoon trade as investors digested the Union Budget speech. At 14:26 IST, the barometer index, the S&P BSE Sensex, was down 307.46 points or 0.77% at 39,600.6. The Nifty 50 index was down 103.5 points or 0.87% at 11,843.25.

In the broader market, the S&P BSE Mid-Cap index was down 0.76%. The S&P BSE Small-Cap index was down 0.93%.

The market breadth, indicating the overall health of the market, was weak. On the BSE, 809 shares rose and 1509 shares fell. A total of 149 shares were unchanged.

Finance Minister Nirmala Sitharman, in her maiden budget, said that India's sovereign external debt to GDP is among the lowest globally at less than 5%. The Government would start raising a part of its gross borrowing programme in external markets in external currencies. This will also have beneficial impact on demand situation for the government securities in domestic market.

This proposal could open up a new source of funding the budget deficit. It could play a critical role in reducing the local government borrowing in rupee and alleviate the pressure on local liquidity, leaving more funds in the local market.

Meanwhile, the government cut FY20 fiscal deficit target to 3.3% from 3.4%. Among other budget proposals, Rs 100 lakh crore investment is aimed for infrastructure sector over 5 years. The government has proposed to allocate Rs 70,000 crore for PSU bank recapitalisation.

The government is setting an enhanced target of Rs 1,05,000 crore for disinvestment and will continue with disinvestment of PSUs in the non-financial space.

FM proposed to increase minimum public shareholding in the listed companies from 25% to 35%. Further, FM proposed to merge the NRI-portfolio investment scheme route with the foreign portfolio investment route.

FM proposed to increase custom duty on gold & other precious metals from 10% to 12.5%. FM assured the nation that, except those unwilling to take the connection, all will have electricity connection, by 2022.

On the equity market front, fishing sector stocks advanced. Uniroyal Marine Exports (up 2.39%) and Avanti Feeds (up 1.04%) advanced.

Fishing and fishermen communities are closely aligned with farming and are crucial to rural India. Through a focused Scheme - the Pradhan Mantri Matsya Sampada Yojana (PMMSY) - the Department of Fisheries will establish a robust fisheries management framework. This will address critical gaps in the value chain, including infrastructure, modernization, traceability, production, productivity, post-harvest management, and quality control, FM said in her speech.

FMCG stocks were mixed. Colgate Palmolive (India) (up 2.51%), Marico (up 2.1%), Dabur India (up 1.8%), Nestle India (up 1%), Hindustan Unilever (up 0.85%), GlaxoSmithkline Consumer Healthcare (up 0.27%), Britannia Industires (up 0.22%) and Procter & Gamble Hygiene & Health Care (up 0.08%) advanced. Jyothy Laboratories (down 0.81%), Tata Global Beverages (down 0.63%), Godrej Consumer Products (down 0.5%) and Bajaj Consumer Care (down 0.42%) edged lower.

Mangalam Organics was up 2.86% to Rs 394 after CRISIL revised company's long term ratings from 'BBB+' to 'A-' with a stable outlook.

Sagar Cements was up 0.65% to Rs 667. The company announced an increase in cement production by 11.11% to 199,490 metric tonne in month of June 2019 over June 2019. The company also reported an increase in cement sales by 12.15% to 201,910 metric tonne in month of June 2019 as against June 2018.

In the commodities market, Brent crude for September 2019 settlement fell 50 cents and traded at $63.32 a barrel. The contract rose $1.42 or 2.27% to settle at $63.82 a barrel in the previous trading session.

MCX Gold futures for 5 August 2019 settlement rose 2.05% at Rs 34,920

Overseas, European markets were trading lower. Asian markets closed on a mixed sentiment on Friday. Market focus is largely attuned to US nonfarm payrolls and unemployment data, expected on Friday. A weaker-than-expected figure could trigger bets that the Fed will cut rates at the end of July.

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