Informist, Thursday, Feb 1, 2024
By Padmini Dhruvaraj
MUMBAI – Domestic benchmark indices are expected to be rangebound on Friday with stock-specific movement as investors will take cues from the Interim Budget presented today and the ongoing corporate earnings season for Oct-Dec, analysts said. The Nifty 50 is expected to find support at 21500 points and face resistance at 21800 points.
“With two major events (Budget and the US Federal Reserve meeting) now behind us, we expect markets to take support from the ongoing earning season and should remain in positive territory,” Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services said in a note.
The Nifty 50 index opened higher today tracking gains in selective heavyweight stocks and also rose above the 21800-mark before the Budget announcement began at 1100 IST. However, it fell more than 100 points during the event and turned choppy for the rest of the day. Eventually, the 50-stock index ended 28.25 points, or 0.1%, lower at 21697.45 points, while the 30-stock Sensex closed 106.81 points, or 0.2%, down at 71645.30 points.
“Historically, markets don’t react too much to interim budgets and that pattern was maintained this time as well. The elections in the upcoming months will be a bigger market mover,” Avdhut Bagkar, technical and derivatives analyst at StoxBox.
Dharmesh Kant, head of equity research at Cholamandalam Securities, said: “There was no takeaway for equity markets from the Budget, it was a statement of account. It is not a growth Budget, it is more of a fiscal consolidation Budget, so that won’t be taken positively by markets in the short term. Expect a reaction tomorrow (Friday) as people go into the findings and try to understand if there is anything hidden in that.”
The Interim Budget for 2024-25 (Apr-Mar) surprised the Street with some positive outlays. The government focused on controlling the fiscal deficit and increased the government’s capital expenditure, but the Street was disappointed that taxation was kept unchanged.
The lowering of the fiscal deficit could prove beneficial for banking stocks, and we can expect some momentum in banks due to this, Jay Patel, research head at Investmentor Securities, said. The capital expenditure outlay was a little surprising, and we could expect some boost in the infrastructure due to that, he added. Housing finance and microfinance companies could also see a boost in the near term as the government pushed for affordable housing in its Budget speech, another analyst said.
The government projected a fiscal deficit of 5.1% of GDP for the next financial year starting April and lowered the target for 2023-24 to 5.8% of GDP. Further, the government pegged the capital expenditure at 11.11 trln rupees, up 16.9% from the revised estimate of 9.50 trln rupees for 2023-24.
“Markets are not in a hurry for the next directional move and the recent price action reaffirms this view,” Ajit Mishra, senior vice president of technical research at Religare Broking said in a note. “Traders have no option but to align their positions accordingly and focus more on stock-specific trading approach. Though we are seeing consistent outperformance from the broader indices despite the overbought condition, we feel it is prudent to restrict exposure and prefer only quality names,” he added.
Further, shares of Tata Motors and UPL will be in focus as these companies will detail their quarterly results on Friday. Shares of Oberoi Realty, Zensar Technologies, and Balkrishna Industries may fall on Friday as the stocks will trade ex-dividend. End
Edited by Tanima Banerjee
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