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Impact Analysis |
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- Union Budget 2026-27 did not make any changes to the income tax rates
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- That was anticipated after the taxes had been cut sharply to a level where income up to ₹12.75 lakhs was tax-free in NTR
- Also, the new Income Tax Act takes effect from April 2026, and that takes care of many of the anomalies in the IT Act
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- Budget hikes STT on F&O, while it rationalizes the tax on share buyback
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- The STT hike is 150% for futures and 50% for options, which is expected to impact trading volumes and arbitrage funds
- Buyback consideration will be treated as capital gains and the cost can be written off as loss; promoters will pay higher tax
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- Budget projected fiscal deficit at 4.3% and debt/GDP ratio at 55.6% for FY27
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- Fiscal deficit is 10 bps lower than FY26, where the government will meet its full-year target of 4.4% helped by spending cuts
- Debt/GDP ratio is being projected at 50% by the year 2030, which is an added positive for global investor sentiments
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- RBI announced its monetary policy for February, holding repo rates at 5.25%
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- This kept the SDF rate (reverse repo) rate at 5.00% and the bank rate as well as MSF rate at 5.25%, with unanimous vote
- The stance of the policy was maintained at neutral, with one dissent vote calling for shift in stance to “Accommodative”
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- GDP growth estimate for FY26 was upped to 7.4%, Inflation to 2.1%
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- The 10-bps upgrade in GDP growth for FY26 puts the RBI estimates for growth in sync with the estimates of MOSPI
- The inflation uptick is more to factor the core inflation impact of gold and silver, even as food deflation is likely to stay
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- On the Budget Day, the much-awaited Indo-US trade deal was signed
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- Finer contours of the deal are awaited and both nations will be putting out these details over the next few days
- The broad intent is to take total Indo-US trade to $500 billion, although it will entail heavy aviation imports from the US
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- The scenario is still not clear if India will continue to buy Russian crude oil
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- Trump had claimed that India had agreed to stop buying oil from Russia and shift to the US and Venezuela for the gap
- The Indian side has not confirmed any such shift, even as there has been no communication to that effect to Russia
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- There are two IPOs that have been announced for the coming week
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- Fractal Analytics opening on 09-Feb will include a fresh issue and an offer for sale with total IPO size of ₹2,834 crore
- Aye Finance opening on same day will also be a fresh issue and an offer for sale with total IPO size of ₹1,010 crore
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- Gold and silver had a highly volatile week in the international spot markets
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- While gold saw recovery in the week, silver corrected nearly 20% on Thursday, closing lower for the current week
- Indian silver and gold ETFs also continued to be volatile as the unrealistic premiums also tended to gradually even out
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- FPIs were net sellers to the tune of $3.95 billion for the month of Jan-26
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- The selling was largely led by banking & financial stocks and consumer facing sectors like durables, FMCG, autos etc
- Interestingly, FPIs bought metal & mining stocks worth $1.2 billion during the month of Jan, as well as capital goods stocks
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- Government is all set to exit IDBI Bank in FY26, with sale likely by March 2026
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- The government will sell 30.48% stake in IDBI Bank, which is expected to be worth ₹33,000 crore, boosting divestments
- LIC will also be selling an equivalent 30.5% stake; with Kotak Bank, Emirates NBD, and Fairfax bidding for the 61% stake
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- Power Finance Corp buys 52.63% in REC, as boards approve the merger
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- The idea behind the merger (announced in the budget) is to create a power finance company of scale to boost funding
- However, even post the merger, the merged entity (PFC) will remain a government company due to its critical business
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- Morgan Stanley pegs Sensex at level of 1,07,000 by the end of calendar 2026
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- Of course, this is a bull case target, and the base case target for the Sensex is 95,000, which itself is a substantial upside
- With the Indo-US trade deal, Morgan Stanley expects easing of FPI selling, stronger rupee and a general equity re-rerating
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- Jefferies sees big benefits for India as the US slashes tariffs from 50% to 18%
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- Labour intensive exports get an edge over competition; even as autos, chemicals, and solar stocks will benefit from this
- At a more macro level, Jefferies sees the rupee strengthening gradually, which is expected to trigger the return of FPI flows
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- Indigo witnessed a fall in its market share by 4% amid the December fiasco
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- Indigo market share fell from 63.6% to 59.6%, on top of the 2% market share loss in November due to cancellations
- However, there were not too many market share gainers as the overall flight passenger traffic itself fell by over 4%
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- SEBI proposes easing “Fit and Proper” criteria for market intermediaries
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- SEBI will drop the current rule of automatic disqualification of an intermediary if there is any pending criminal complaint
- SEBI felt such a blanket disqualification was unfair to the intermediaries, its KMP, as well as to controlling shareholders
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- BPCL plans a massive ₹25,000 crore outlay for city gas distribution (CGD)
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- The company also plans to set up a trading desk in Singapore to scale up global crude, LNG, and refined fuel operations
- The investment of ₹25,000 crore will be over a period of 5 years and will be spread across nearly 26 geographies
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- Interbank call money rates fell to a 42-month low of 4.40% on 05-February
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- This was triggered by RBI liquidity infusion, which also lifted the repo rate / call rate gap to a 7-month high of 85 bps
- The RBI has been infusing liquidity through open market operations (OMOs) as well as through currency swaps
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- PhysicsWallah reports 34% revenue growth and 33% growth in net profits
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- For Q3FY26, its net profit of ₹102 crore on top line revenues of ₹1,082 crore translates into net margins of 9.43%
- The growth was led by user expansion with paid users reaching 43.70 lakhs; 21% higher over the previous year
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- M&M to invest ₹15,000 crore in Nagpur facility to manufacture 6 lakh units
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- The facility will be operational in 2028; with manufacturing capacity of 5 lakh vehicles and 1 lakh tractors in total
- The Nagpur plant will cater to domestic and export markets; with focus across EVs, IC engines, hybrids, and future tech
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- Big FMCG companies are paying top dollar for hitherto Instagram brands
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- This trend has been visible across FMCG companies like Tata Consumer, Marico, Hindustan Unilever, and others
- According to CRISIL, nearly two-thirds of acquisitions by the FMCG companies were essentially in the D2C space
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