daily stock picks

budget 2020: realty stocks gain led by indiabulls real estate; hul up 2%, autos rise

Saturday, Feb 1 2020 10:50AM

Finance Minister Nirmala Sitharaman is all set to present the Union Budget 2020 wherein it is largely expected that the FM will put emphasis on tax relief, fiscal consolidation, push for rural demand, focus on affordable housing, a boost for auto sector and infrastructure growth.

The Indian stock market continues felling the effect of coronavirus. Sensex is up 87.71 points or 0.22 percent at 40811.20 while the Nifty gained 21.50 points at 11983.60.

Nifty Realty gained over a percent as the market is expecting the government to continue its focus on affordable housing and a greater allocation under the Pradhan Mantri Aawas Yojna could be seen along with focus on execution.

The top gainers from the real estate space included Indiabulls Real Estate, Prestige Estates, Sunteck Realty, Sobha, DLF and Brigade Enterprises.
According to reports by IIFL Securities, affordable housing benefits are currently capped to houses below Rs 4.5million – if that limit is revised upwards, it will benefit listed players and demand in general. Tax rebate for interest on home loans is capped at Rs 0.2 million per annum. Enhancing that limit is expected to bring back investor-led demand.

Edelweiss Financial Services expects the government to tweak tax concessions like raising tax deduction on rental income to 50 percent from the present 30 percent to give a boost to rental housing while Sharekhan expects lower flat tax rate without exemptions or favourable readjustment in tax, increase in the limit of exemption under Section 80C, reduction in interest on home loans to 7 percent and reduction in stamp duty by 50 percent for transactions on or before March 31, 2020.

The FMCG index added a percent ahead of the Budget with the top gainers being Emami which jumped over 5 percent followed by Hindustan Unilever, Godrej Consumer, Marico and Tata Global Beverage.

The auto sector gained half a percent as the government is expected to announce measures to shore up the auto industry, impacted by the credit crisis and BS-VI norms that kick in from April 2020.

“There is a very high probability that the government will announce an incentive-based scrappage plan in the Budget which will benefit the sector, especially the MHCV space, which has been the worst impacted,” Angel Broking said in a report.

The top gainers included Exide Industries, Bosch, Apollo Tyres, Motherson Sumi Systems, MRF and Amara Raja Batteries.

Research firm Edelweiss expects a reduction in GST rates for small cars and two-wheelers from 28 percent to 18 percent. It expects support for setting up scrapping centres and expects reducing custom duty on key components used in EVs which are not manufactured in India and keep it in the range of 10 percent.
India VIX was up 0.46 percent and is trading at 17.45 level.

The top gainers from the Nifty were Hindustan Unilever, GAIL India, JSW Steel, Bajaj Finserv and Bajaj Finance while the top losers included Coal India, Power Grid, Tech Mahindra, NTPC and Tata Steel.

The most active stocks were IRCTC, Reliance Industries, State Bank of India, Hindustan Unilever and Tata Motors.

About 1040 shares have advanced, 597 shares declined, and 81 shares are unchanged.


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