In a mild setback, Bharat stock indices commenced Tuesday’s trading session slightly lower following a notable surge in the previous session. At the opening bell today, the benchmark Sensex and Nifty were down by about 0.1% compared to their previous day’s closing. Analysts attribute this marginal decline to profit booking as domestic investors prepare for an eventful week.
Investors are gearing up for Finance Minister Nirmala Sitharaman’s budget proposals and other macro-economic guidance, set to be unveiled on Thursday. Sitharaman is scheduled to present the interim union budget, which traditionally addresses fiscal requirements until a new government is formed after the Lok Sabha polls.
Simultaneously, attention is focused on the outcome of the US Federal Reserve’s first policy meeting of the year 2024, slated for Wednesday. The decisions made in this meeting will be closely monitored by investors as they assess its potential impact on the Indian market.
Adding to the cautious sentiment, foreign portfolio investors (FPIs) have shifted from being net buyers to net sellers in the Indian equity market this January. Data from the National Securities Depository Limited (NSDL) reveals FPIs selling Indian stocks worth Rs 19,664 crore so far this month. In contrast, they were keen buyers in November and December, accumulating stocks worth Rs 66,135 crore during that period.
Looking ahead, market experts emphasize the influence of budget expectations on short-term market trends. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, notes that major changes in taxation related to the capital market are not anticipated. However, any unexpected proposals could impact the market. He highlights the strength of large-cap stocks such as RIL, Bharti Airtel, L&T, and ICICI to support the market.
Ajit Mishra, SVP – Technical Research at Religare Broking, highlights the stability in the banking sector and global optimism as factors aiding market recovery. Nevertheless, he cautions about potential hurdles limiting upside potential. Mishra recommends focusing on sectors/themes with consistent buying trends, advocating a cautious approach with limited aggressive long positions and a preference for hedged bets in the face of ongoing market volatility.
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