Mid-day Mood | Sensex, Nifty muted as post-Budget rally loses steam

Benchmark indices hovered near the flatline for much of the session so far.

The benchmark Nifty 50 and Sensex hovered near the flatline as of afternoon trade on February 5 as the post-Budget market rally cooled down. In addition, stronger-than-expected US jobs data for January has cemented Federal Reserve's remarks to not cut rates just yet.

US nonfarm payrolls rose by 353,000 in January, the Labor Department reported Friday, well above the estimated increase of 185,000.

The biggest arose from the higher-than-expected rise in wages by  4.5 percent on year. Economists had predicted a 4.1 percent increase in wages in January.

Around noon, the Sensex was up 118.00 points or 0.16 percent at 72,203.63, and the Nifty was up 63.50 points or 0.29 percent at 21,917.30. About 1,768 shares rose, 1,555 fell, and 104 were unchanged.

"The latest data on job creation in January has again surprised with the addition of 3,53,000 jobs. There are no signs of the US economy tipping into a mild recession any time soon. This means that the Fed rate cuts expected this year are likely to be back-loaded," said  V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

"This has pushed up the 10-year bond yield again above 4 percent and the dollar index to 104 which might prompt some selling by FIIs. But the market momentum is good supported by strong DII and retail buying," he added.

"As per different time-frames, a mixed trend was seen for the Nifty 50 where the index formed Above The Stomach (Bullish) candle in the weekly chart while the daily chart denotes a reversal by forming a Shooting Star candle. Considering the larger picture, the trend is positive with the downside protected at 21,700-21,645 while on the higher side, a convincing close above 22,100 is a must," Aditya Gaggar, Director of Progressive Shares

For Bank Nifty, Gaggar predicts a strong move above 46,600 to be required to resume its uptrend while on the flip side 45,700 will act as a strong support.

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