Sensex Gain 740 Points, Nifty at 23,508; Nifty Prediction for Monday

Nifty Prediction for Monday

Market Ends on a Bullish Note: What to Expect on Budget Day

Market Overview: The stock market closed on a high note today, with strong gains across major indices, marking the fourth consecutive bullish session.

Indian benchmark indices surged ahead of the much-anticipated Union Budget announcement. The rise in the market was not only driven by buying interest across various sectors but also aided by positive global cues, which provided a lift to investor sentiment.

Investors appeared to be positioning themselves for potential positive fiscal measures in the upcoming budget.

As we approach the Union Budget, which will be presented tomorrow, the market’s response today suggests that there is an underlying optimism regarding potential announcements.

Whether this momentum can continue will depend on the government’s fiscal policies, particularly those aimed at stimulating growth and improving consumer sentiment.

Stock Market Performance:

The Indian equity market saw robust gains today, with both the Sensex and Nifty posting impressive increases.

The Sensex rose by 740.76 points or 0.97%, closing at 77,500.57, while the Nifty surged by 258.90 points, or 1.11%, to close at 23,508.40.

This marked the fourth consecutive day of positive movement for the indices. In total, around 2,635 stocks advanced, 1,131 stocks declined, and 120 stocks remained unchanged, indicating widespread optimism across market segments.

Among the top gainers in the Nifty were stocks like Tata Consumer Products, Trent, Bharat Electronics, Nestle India, and L&T.

These companies benefitted from investor enthusiasm surrounding growth expectations, particularly in sectors such as FMCG and infrastructure. However, not all sectors experienced gains.

Stocks like Bharti Airtel, ICICI Bank, Bajaj Finserv, Apollo Hospitals, and JSW Steel faced declines, reflecting the varied sectoral performance in the broader market.

Sector Performance:

One of the most notable aspects of today’s market performance was the strength seen across almost all sectoral indices. Every sector closed in the green, signaling broad-based optimism.

The consumer durables sector was among the top performers, benefiting from rising expectations around higher consumption following the budget. Similarly, oil and gas, power, PSU, real estate, and FMCG stocks each gained about 2%.

In particular, the FMCG sector saw significant momentum, with companies like Tata Consumer Products and Nestle India leading the charge.

The capital goods sector outperformed the broader market, rising by nearly 4%, driven by optimism about infrastructure spending and potential policy announcements in the budget aimed at stimulating growth in this segment.

Mid-cap and small-cap stocks also performed well today, registering gains of around 2%, outpacing the frontline indices.

The BSE midcap index rose by 1.89%, and the small-cap index gained 2.11%. This reflects an underlying optimism in the broader market, particularly among stocks with higher growth potential.

Market Sentiment and Technical Indicators:

Market sentiment today was overwhelmingly positive, and technical indicators also pointed to a bullish outlook, at least in the short term.

Aditya Gaggar, Director at Progressive Shares, noted that the last trading day of the month was firmly in favor of the bulls, as the market showed positive momentum right from the start of the session.

Gaggar emphasized that the Nifty, in particular, closed with a strong bullish candlestick, signaling a breakout from its falling wedge formation.

This is a positive technical development that suggests the market may continue to move upward in the short term.

However, with the Union Budget announcement scheduled for tomorrow, there is an expectation of heightened volatility.

While the market has shown resilience, sharp moves in either direction are likely as traders and investors digest the budget proposals.

Nifty’s immediate support is seen around the 23,400 mark, and on the upside, resistance is expected between 23,740 and 23,860.

Given the volatility that often accompanies major policy announcements, these levels will be important for traders to watch closely in the coming days.

Global Cues and Their Impact:

One of the key factors driving the market today was the positive global sentiment, largely stemming from the European Central Bank (ECB)’s recent decision to cut interest rates by 25 basis points.

This move resulted in a decrease in U.S. bond yields, which helped improve global investor sentiment and boosted risk appetite.

As a result, equity markets around the world gained ground, which had a positive spillover effect on the Indian markets.

The market’s response to these global developments highlights the interconnectedness of global financial markets. With the ECB’s decision, global liquidity is expected to increase, supporting the bullish momentum in emerging markets like India.

Additionally, lower bond yields in the U.S. may also help maintain liquidity in global markets, providing more capital for equity investments.

Expectations from the Union Budget:

As the market turns its focus to tomorrow’s Union Budget announcement, expectations are high that the government will take measures to boost economic growth, especially in the wake of challenges like inflation and global uncertainties.

Among the most anticipated announcements is the possibility of changes in income tax slabs for the salaried class.

Many analysts believe that the government may increase the basic exemption limit or raise the standard deduction, which could provide immediate relief to taxpayers and enhance disposable income.

This, in turn, could result in higher consumption across various sectors, providing a further boost to the economy.

The FMCG sector, which saw strong gains today, is one of the sectors that would benefit from increased disposable income.

Companies like Tata Consumer and Nestle India, which were among the top gainers, could see continued growth if the budget results in higher consumer spending.

Additionally, analysts expect the government to focus on sectors like infrastructure, manufacturing, and digital transformation, which could drive growth in the coming years.

Capital goods stocks, which saw strong gains today, may continue to benefit from any such announcements in the budget.

Infrastructure spending has been a key theme in recent years, and any continuation or expansion of these measures would likely be well-received by the market.

Final Remarks:

The market today showed strong bullish momentum, driven by sectoral gains, positive global cues, and investor optimism ahead of the Union Budget.

The broad-based rally suggests that the market is anticipating positive measures, particularly those aimed at boosting consumption and economic growth.

However, with the budget announcement on the horizon, heightened volatility is expected. Investors should remain cautious and keep an eye on key support and resistance levels for potential market movements.

In particular, any fiscal measures aimed at improving consumer sentiment, such as income tax relief, would likely have a positive impact on sectors like FMCG, real estate, and consumer durables.

As always, while optimism is high, it is important to note that markets can be unpredictable, and swift changes in sentiment can occur depending on the budget’s specifics.

Investors will be looking to tomorrow’s announcement to see how the government’s fiscal policies will shape the economic landscape in the coming months.