Budget Impact
Maruti Suzuki, Cipla, Eicher Motors, SBI Life Insurance, and Power Grid Corporation led the Nifty, while UltraTech Cement, L&T, Dr Reddy’s Laboratories, JSW Steel, and Grasim Industries fell.
In the tumultuous day on February 1, Finance Minister Nirmala Sitharaman presented the 2018 Interim Budget with no huge news, keeping Indian equities indices flat.
At closure, the Sensex was down 106.81 points or 0.15 percent at 71,645.30 while the Nifty was down 28.20 points or 0.13 percent at 21,697.50.
After a strong start, the market fluctuated and reached its highs before FM delivered the budget. Since there were no noteworthy developments, the market erased all gains and traded flat with a bearish bias before closing around day’s low.
Maruti Suzuki, Cipla, Eicher Motors, SBI Life Insurance, and Power Grid Corporation led the Nifty, while UltraTech Cement, L&T, Dr Reddy’s Laboratories, JSW Steel, and Grasim Industries fell.
Auto, bank, FMCG, and power gained 0.2-0.8 percent, while capital goods, metal, and realty fell a percent.
The BSE midcap and smallcap index fell 0.4 and 0.2 percent, respectively.
The volume of India Cements, Indus Towers, and Godrej Consumer Products stocks increased by almost 600%.
India Cements, Aurobindo Pharma, and Cholamandalam Investment and Finance Company had brief build-ups, whereas Godrej Consumer Products, Canara Bank, and Punjab National Bank had extended ones.
Indian Overseas Bank, Bank of India, BEML, BL Kashyap, Canara Bank, CARE Ratings, Delhivery, Gallantt Ispat, GE Power India, Godrej Consumer, HUDCO, India Tourism Development Corporation, Indian Bank, Infibeam Avenue, LIC Housing Finance, Max Healthcare, Motherson Sumi Wiring India, NBCC (India), Punjab & Sind Bank, Repco Home, Sangam India, Shipping Corporation, Torrent P
February 2 forecast
The interim budget was the much-anticipated non-event, and the Index oscillated in a narrow range to close at 21,697.45, down 28.25 points. Media and Metal fell over 1%, but PSU Banking rose over 3%. Auto and Pharma activities was mixed. Broader markets saw Midcaps correct and move with the Benchmark Index while Smallcaps closed in green.
The daily chart showed a modest bearish candle, but the undertone remains positive with 21DMA support at 21,630 and immediate resistance at 21,840.
The Nifty opened positively and traded range-bound all day. On event day, the Nifty closed marginally in the red, down ~36 points, despite a limited range compared to recent sessions. The Nifty has been trapped between 21200 and 21900 on daily charts for weeks. The Nifty has struggled to close above the 61.82% Fibonacci retracement level (21747) due to selling pressure. We expect the range-bound action to continue. The hourly momentum indicator crossed negative while the daily crossed positive. Furthermore, prices are rangebound. Price and momentum indicator divergence suggests range bound price movement for the Nifty. 21550–21500 are key support levels, while 21850–21900 are urgent hurdles.
Positive momentum continued for Bank Nifty. The bank Nifty maintained on to the hourly moving averages’ support zone of 45660–45700 and resumed its upmove. We expect the Bank Nifty to rise to 46570–46800 in the short run. A positive crossover in the Daily momentum indicator is a buy signal and may accelerate the upmove.Investment gurus on Moneycontrol.com share their own opinions and suggestions, not the website or its administration. Moneycontrol.com urges investors to consult authorized specialists before investing.
| FII Bought | Â 1,660.72Â Cr |
| DII Bought | 2,542.93Â Cr |
Indian Market Stocks
| Sensex | -106.81 | -0.15% | 71,645.30 |
| Nifty 50 | -28.25 | -0.13% | 21,697.45 |
| Bank Nifty | 191.85 | +0.42% | 46,188.65 |
Market Movers
| Maruti Suzuki | 451.05 4.43% | UltraTechCement | -245.05 -2.41 |
| Cipla | 36.65 2.71% | Larsen | -81.75 -2.35% |
| Power Grid Corp | 6.50 2.51% | Grasim | -46.40 -2.13% |
| Eicher Motors | 93.60 2.44% | Dr Reddys Labs | -128.00 -2.09% |
| SBI Life Insura | 31.60 2.26% | JSW Steel | -16.95 -2.07% |
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All sectoral indices except Nifty realty ended in the red. The financial, pharma, bank, IT, FMCG, and healthcare index fell over 1%.
The Sensex and Nifty fell again as banks and IT sectors fell, FII selling and dwindling chances of US rate cuts weighed on mood.
At closure, the Sensex was down 359.64 points or 0.51 percent at 70,700.67 while the Nifty was down 101.40 points or 0.47 percent at 21,352.60. About 1,813 shares rose, 1,423 fell, and 55 remained unchanged.
Midcap indices retreated, although the Nifty smallcap rose 0.5 percent.
Every sectoral index except Nifty Realty ended in the red. The financial, pharma, bank, IT, FMCG, and healthcare index fell over 1%.
The market will be closed on January 26 for Republic Day.
Analysts attributed the losses to FII selling, WTI oil rise, and fading US rate drop chances.
Watch our market blog for live updates.
Was the fix anticipated?
Due to inflated valuations in most mid- and small-cap equities without fundamental or technical support, a market correction was needed. Tradejini COO Trivesh D expects the correction to last a few more sessions before account-Budget 2024.
Data suggests that the market is negative before the budget, and February has averaged 1.4 percent decline over the last decade. This tendency should continue.
Technical View
The Nifty has support at 21,100 and resistance at 21,400. Vaishali Parekh, vice-president of technical research at Prabhudas Lilladher, said a drop below 21,000 will weaken the trend and investors should expect additional decline.
January derivatives contract expiration and earnings season will keep volatility high.
Market Market Market Market Market
After a shaky start, the Nifty was volatile all day. The index showed hints of reversal on the hourly chart. However, it closed below 21500 resistance. A decisive move above 21500 might boost the index. Downside support is 21400-21350. A breach above 21500 might push the index above 21700.
Markets recovered from Tuesday’s drop and rose about 1% amid turbulence. Initial sentiment was negative, but select heavyweights rebounded to stop the loss and assist the Nifty close in the green. While banking and realty ended weak, metal, energy, and IT performed strongly. The broader indices recovered and gained nearly 1.5 percent each.
Consolidation is possible as the banking index tested its 200 EMA on Wednesday. However, other crucial sectors would struggle to boost Nifty. We recommend stock-specific trading and maintaining positions on both sides.
For Nifty, the immediate resistance is around 22,050 and support at 21,500 and 21,400, Nada added.For Bank Nifty 48,000 is a key obstacle, underlined by strong Call writing. A decisive breakout above the may unleash a rapid short-covering surge. Immediate support is at 47,200-47000, a break of which will probably prompt severe selling pressure, perhaps leading to a fall, he added.