The market witnessed extreme volatility on the Budget day after growth-oriented, all-rounder Budget announcements by Finance Minister Nirmala Sitharaman. The benchmark indices ended on a mixed note after she presented the last full Budget for the current government before the 2024 general elections.
At close, the Sensex was up 158.18 points or 0.27 percent at 59,708.08, and the Nifty down 45.90 points or 0.26 percent at 17,616.30.
Also Read - Budget Impact on Sensex Stocks
After a strong start for the day, ahead of the Budget presentation, the market zoomed after the announcements with the Nifty inching closer to 18,000 and Sensex crossing 60,000 intraday. However, profit booking in the second half dragged the indices into the red zone, before closing mixed.
"Markets have been extremely volatile on the Budget day. The volatility can be attributed to uncertainty on taxation around Market Linked Debentures (MLDs), cap of Rs 10 crore on capital gains set off against house property and negative policy announcement for the insurance sector, which offset the positives on account of higher-than-expected allocation towards capital expenditure and a better-than-expected fiscal deficit number for FY2024," said Manish Jeloka, Co-head of Products and Solutions at Sanctum Wealth.
"Continued pressure on Adani group stocks also weighed on the market sentiment and contributed to the volatility," he said.
Adani Group stocks fall 2-28 percent
Most of the Adani group stocks again came under selling pressure on Wednesday, after the Hindenburg Research report fiasco last week, ignoring success of the company's follow-on public offer.
Also Read: Manufacturing PMI declines to three-month low of 55.4 in January
On February 1, Adani Enterprises, Adani Transmission, Adani Ports and Special Economic Zone, Adani Green Energy, Adani Total Gas, Adani Power and Adani Wilmar fell between 2-28 percent.
Stocks and sectors
ITC, ICICI Bank, JSW Steel, Tata Steel and Tata Consumer Products were among the top gainers on the Nifty, while losers were Adani Enterprises, Adani Ports, HDFC Life, SBI Life Insurance and Bajaj Finserv.
Among sectors, Nifty PSU Bank index shed 5.6 percent, Metal index lost 4.5 percent, while Infra and energy indices shed 1 percent each.
The BSE midcap and the smallcap indices fell 1 percent each.
On the BSE, oil and gas and power shed 1 percent each, while realty and auto indices fell 0.8 percent each. However, FMCG, information technology and metal indices gained 0.5-0.7 percent.
More than 100 stocks touched their 52-week high on the BSE including PNC Infratech, ITC, M&M, Polycab India, Ratnamani Metals, Radico Khaitan, Manaksia, Jindal Steel, Jindal Saw, Indian Bank and Anand Rathi Wealth.
On the other hand, Whirlpool Of India, Sintex Industries, Rupa & Company, MT Educare, Jubilant FoodWorks, ICICI Prudential Life Insurance Company, Hubtown, Glaxosmithkline Pharmaceuticals, Gland Pharma, Gateway Distriparks, Adani Ports and Bal Pharma.
Among individual stocks, a volume spike of more than 600 percent was seen in Syngene International, Whirlpool of India and SBI Life Insurance Company.
A short build-up was seen in Adani Enterprises, Adani Ports and ICICI Prudential Life Insurance Company, while along build-up was seen in Indian Hotels, Polycab India and Apollo Tyres.
Outlook for February 2
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
It was no different on the Budget day as markets once again were extremely volatile and Sensex gyrated nearly 2,000 points intra-day. However, at one point during the Budget presentation, benchmark index had vaulted nearly 1,200 points but a rout in the Adani group stocks and nervousness ahead of the important Federal Reserve meet on interest rate punctured the rally and saw the index end mixed.
Technically, the Nifty has 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.
Ajit Mishra, VP - Technical Research, Religare Broking
Markets witnessed a roller coaster ride on the Union Budget day but eventually settled with a marginal cut. The bulls were in control in the first half but the tone reversed completely as the session progressed.
Consequently, the Nifty index settled at 17,616.30; down by 0.26%. Meanwhile, a mixed trend on the sectoral front kept the traders busy wherein FMCG and IT showed tremendous resilience.
Markets will react to the outcome of the US Fed meeting in early trade on Thursday. Besides, the overhang of the Union budget and scheduled weekly expiry would further add to the choppiness.
A decisive close below the 17,550 zone in Nifty would strengthen the bears. We thus reiterate our negative view and suggest limiting trades until we see some stability.
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas:
The Nifty witnessed huge swings in both the directions on February 01. It opened on a positive note & traded with positive bias in the first half of the session. The index went higher to test the 20 DMA.
On the higher side, however, it attracted steep selling pressure as it neared the 18,000 mark. Thereon the Nifty nose-dived & breached the swing low on the daily chart. Ultimately the index recovered from around 17,350 & closed negative by about 45 points.
All this price action makes today’s extremes as crucial support & resistances. Thus, for the short term, the index is expected to stay in the range of 17,350-18,000.
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