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HomeNewsBusinessMarketsSensex, Nifty extend early gains ahead of monthly F&O expiry, Budget 2025; broader markets outperform

Sensex, Nifty extend early gains ahead of monthly F&O expiry, Budget 2025; broader markets outperform

In the broader market, both the BSE Midcap and Smallcap indices rose by almost 1 percent, outperforming the benchmarks, which opened flat after the U.S. Federal Reserve held rates steady and gave no indication of future cuts.

January 30, 2025 / 10:20 IST
In terms of sectoral performance, the financials and oil & gas sectors saw gains, while the auto sector dragged.
     
     
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    Indian equities were trading higher after a flat open on January 30 after the U.S. Federal Reserve held rates steady and remained tight-lipped about the trajectory of future rate cuts. With global cues offering little support, all eyes are now on Finance Minister Nirmala Sitharaman's Union Budget 2025, where investors hope for growth-boosting measures balanced with fiscal discipline.

    The expiry of January futures and options contracts looms large today, historically a high-volatility event as traders roll over their positions. India VIX, the volatility gauge, has surged for five consecutive sessions, hitting over 19 on November 29—its highest in nearly a month.

    "Today is likely to be a largely flat session. Market swings are hard to predict, but there seems to be an upside bias. While movements can go either way, downside risk appears capped for now," said Nirav Karkera, Head of Research at Fisdom.

    Follow our live blog for all the market action

    Karkera noted that while the Budget is expected to boost consumption and investment, the government’s unwavering commitment to fiscal consolidation could limit aggressive growth measures. "If growth comes at the cost of fiscal discipline, it may dampen market sentiment. For now, there is cautious optimism, and buying interest may emerge ahead of the Budget," he added.

    At 10:12 AM, the Sensex was up 300 points or 0.4 percent at 76,832, and the Nifty was up 120 points or 0.5 percent at 23,283. About 2,454 shares advanced, 680 shares declined, and 127 shares were unchanged.

    Foreign investors, however, remain unconvinced. FPIs have dumped Indian equities worth Rs 81,600 crore in January so far, marking the second-highest monthly outflow on record. Sticky U.S. Treasury yields and lacklustre domestic earnings have left little incentive for foreign inflows.

    The damage is evident—Nifty 50 and Sensex have shed nearly 2 percent in January, staring at their longest monthly losing streak in 23 years. The Nifty and Sensex are still down about 11.5 percent each from their record highs on September 27.

    Meanwhile, Wall Street faltered overnight and the dollar held firm after the Federal Reserve kept interest rates unchanged at 4.25-4.5 percent and offered no clear timeline for future cuts. With inflation largely stagnant in recent months, the Fed removed its previous mention of progress toward its 2 percent target, stating instead that price pressures remain elevated.

    Also Read | US Fed signals no rush for rate cuts amid elevated inflation, but markets trim losses as Powell downplays worry

    "There would be no rush to cut rates again until inflation and jobs data made it appropriate," Fed Chair Jerome Powell stated, adding that policymakers are also awaiting clarity on Trump’s policies to gauge their impact. Markets now expect only a modest 50-bps rate cut by year-end.

    In terms of sectoral performance, the financials and oil & gas sectors saw gains, while the auto sector dragged.

    Power Grid, Bajaj Finance, Hindalco, ONGC, and Bajaj Finserv were the top gainers on the Nifty 50, gaining 2-3 percent, while Tata Motors, Infosys, and ICICI Bank were the biggest losers, falling 0.2-7 percent.

    The largest NBFC in India, Bajaj Finance's share rose 3 percent after it reported a 17 percent growth in consolidated net profit for Q3 FY25, reaching Rs 4,247 crore, compared to Rs 3,639 crore in the same period last year. The net interest income (NII) in Q3FY25 increased by 23 percent to Rs 9,382 crore, up from Rs 7,655 crore year-on-year.

    Shares of Bajaj Finserv, the parent company of Bajaj Finance, gained over 2 percent ahead of its earnings report due today.

    Tata Motors shares fell over 7 percent after the company reported weak Q3 results, with margins missing estimates despite PLI benefits. Brokerages Jefferies and UBS were bearish, while CLSA remains bullish on the stock.

    In the broader market, both the BSE Midcap and Smallcap indices gained nearly 1 percent, outperforming the benchmarks, which opened flat after the U.S. Federal Reserve kept rates steady and offered no clues about future cuts.

    "In light of our recent analysis, we have shifted from a bearish viewpoint to a more cautious stance as we approach the upcoming Budget session," said Sameet Chavan, Head of Research, Technical and Derivatives at Angel One. Despite this change, he believes that the potential for significant downside appears limited.

    "On the technical levels front, the 23,000 zone is anticipated to serve as a protective barrier against any intraday fluctuations in the Nifty 50 index, acting as a cushioning zone, followed by the sacrosanct support of 22,900-22,800. On the upside, the 20 DEMA (Double Exponential Moving Average), which aligns with the neckline of the prior breakdown at 23350-23400, establishes a crucial resistance point," Chavan said.

    Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

    Neeshita Beura
    first published: Jan 30, 2025 09:23 am

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