Equity benchmarks the Sensex and the Nifty ended mixed on February 1 after Finance Minister Nirmala Sitharaman presented Union Budget for the financial year 2023-23 in Parliament.
Among the key highlights of the Budget were an increase in the income tax rebate limit from ₹5 lakh to ₹7 lakh in the new tax regime and an increase in capital investment outlay for the third year in a row to ₹10 lakh crore.
Analysts termed the Budget growth-oriented. The market, too, cheered the Budget as the Sensex jumped 1,224 points to 60,773.44 in intraday trade. However, the focus shifted back to the US FOMC outcome and the Adani-Hindenburg episode which dragged the market lower.
“The Budget remains focused on long-term economic growth through capex and sops to boost consumption for the middle-income group. This would support strong corporate earnings with positive bias for sectors like infra, housing, cement, cap goods, auto and tourism. Despite upcoming state elections, the government did not deliver a populist budget and tried to maintain fiscal prudence,” said Motilal Oswal, MD & CEO, Motilal Oswal Financial Services.
Sensex managed to close in the green on gains in shares of select heavyweights such as ICICI Bank, HDFC twins, ITC, Infosys and TCS.
However, Nifty50, BSE Midcap and BSE Smallcap indices ended in the red.
Sensex closed 158 points, or 0.27 percent, higher at 59,708.08 while the Nifty ended at 17,616.30, down 46 points, or 0.26 percent.
BSE Midcap index fell 0.96 percent while the Smallcap index suffered a loss of 1.10 percent.
The overall market capitalisation of BSE-listed firms dropped to ₹266.5 lakh crore from ₹270.2 lakh crore in the previous session, making investors poorer by ₹3.7 lakh crore in a single session.
The rupee ended flat at 81.93 per dollar on a late selloff in domestic markets. Overnight gains in crude oil prices also weighed on the rupee. Brent Crude traded above the $85 per barrel mark.
Top Sensex gainers: Shares of ITC, Tata Steel, ICICI Bank, TCS, HDFC Bank and HDFC ended as the top gainers in the Sensex index.
Top Sensex losers: Shares of Bajaj Finserv, SBI, IndusInd Bank, Mahindra and Mahindra and Sun Pharma ended as the top losers in the Sensex index.
Barring Nifty FMCG (up 1.13 percent) and IT (up 0.93 percent), all indices ended in the red on NSE, with the Nifty PSU Bank suffering a loss of 5.68 percent and Nifty Metal index falling 4.50 percent.
Nifty Media (down 2.70 percent) and Nifty Oil & Gas (down 2.03 percent) also suffered significant losses.
Experts' views on markets
Vinod Nair, Head of Research at Geojit Financial Services pointed out that a well-tuned budget with a strong emphasis on consumption and capex lifted optimism in the market; however, volatility sparked in the latter half as focus shifted back to the Adani saga and FOMC meeting.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities observed it was no different on the budget day as markets once again were highly volatile and Sensex gyrated nearly 2,000 points intraday.
"At one point during the Budget presentation, the benchmark index had vaulted nearly 1,200 points but a rout in the Adani group stocks and nervousness ahead of the important Federal Reserve meeting on interest rate punctured the rally and saw the indices end mixed," said Chouhan.
Technical views by experts
As per Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas, Nifty went higher in intraday trade to test the 20-day moving average. However, it attracted steep selling pressure as it neared the 18,000 mark. Thereon the Nifty nosedived and breached the swing low on the daily chart.
"Today's price action makes today’s extremes as crucial support and resistances. For the short term, the index is expected to stay in the range of 17,350-18,000," said Ratnaparkhi.
Chouhan pointed out that the Nifty formed a long-legged Doji candlestick on the daily chart, which is indicating an indecisive trend.
"Now 17,750 will act as a resistance and below the same, the index may retest 17,400-17,350 levels. On the flip side, above 17,750 we can see a continuation of a pullback rally till 17,850-17,900. On dismissal of 17,350, it will slide further towards 17,250-17,200,” said Chouhan.
Key market data
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of MintGenie.