Monday, February 3, 2025
Market Overview
- Post-Budget Market Reaction: The Indian stock market closed nearly flat in the special Budget session on Saturday. The Sensex inched up by 5.39 points to 77,505.96, while the Nifty 50 dipped by 26.25 points to 23,482.15 after a very volatile day following the Finance Minister’s Budget speech.
Investors are digesting the modest 10% year-over-year increase in capital expenditure announced in the Union Budget 2025.
Key Factors Influencing the Market This Week
- Budget Implications: The government’s move to eliminate taxes on income up to ₹12 lakh under the new tax regime aims to boost consumption, potentially benefiting sectors like FMCG and automotive.
- RBI Policy Outlook: The Reserve Bank of India’s upcoming policy meeting is anticipated to result in a rate cut, especially with declining food prices. Such a move could influence banking stocks and overall market liquidity.
- Corporate Earnings: Major companies are set to release their Q3 earnings this week. Power grid, Divis Lab, Swiggy, Titan, Asian Paints, Tata Power, SBI, and Bharti Airtel are releasing results in this week.
- Foreign Investor Activity: Foreign Institutional Investors (FIIs) have been net sellers for the 22nd consecutive session on Saturday. It remains to be seen this week if FIIs become net buyers.
- Global Market Trends: It is worth noting that DJI fell 337 points on Saturday, which is a fall from levels of 45050-70, previous ATH in December 2024. (Potentially a double top?)
Movements in international markets, especially in the U.S. will influence domestic sentiment. Notably, U.S. markets declined on Friday due to tariff concerns.
Technical Insights
- Nifty Levels: The Nifty has immediate resistance between 23,500 and 23,600. A decisive move above this range could pave the way towards 24,000. Immediate support is identified at 23,350 and 23265.
IPO Spotlight
- Initial Public Offerings (IPOs): India is gearing up for a significant year in IPOs, with at least seven companies, including Groww and Pine Labs, expected to raise at least $1 billion each. The total equity fundraising could surpass $23 billion, following last year’s $19.6 billion from 336 IPOs.
Global Economic Indicators
- U.S. Federal Reserve Actions: Fed leaves rates unchanged, sees no hurry to cut again, coupled with indications of fewer cuts ahead.
Looking Ahead
Traders are advised to stay cautious for this week. Let market give a clear indication on Monday or Tuesday depending on where it closes strongly. Bullish sentiment will be strong above 23600, and Bearish sentiment will prevail below 23265.
Investors should stay vigilant as the market navigates through budgetary impacts. Diversifying portfolios and focusing on fundamentally strong sectors may offer immunity in potential volatility.
Stay informed, stay ahead with Market Mint.
-Team Market Mint
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