Indian benchmark indices ended lower on the Interim Budget Day as Finance Minister Nirmala Sitharaman refrained from making any big-bang announcements in her budget speech. The sentiment was further dented by weak global cues as Asian and European markets witnessed subdued trade following negative closing on Wall Street overnight as investors digested the Federal Reserve’s latest policy announcement. The U.S. Fed kept its key policy rate unchanged for a fourth consecutive time at 5.25%-5.50%.
The markets oscillated in a narrow range on the budget day and settled marginally lower as investors resorted to profit booking at higher levels. The BSE Sensex ended the day with a loss of 107 points at 71,645, and the NSE Nifty settled 28 points lower at 21,697. The market witnessed choppy trade, with Sensex hitting a high of 72,151, and tumbling 577 points from the day’s high to touch an intraday low of 71,574. In a similar trend, the Nifty50 climbed to
21,833 and then slipped into the red to hit a low of 21,656, registering a decline of 177 from the day’s pick.
The broader market also witnessed correction, with BSE Midcap and Smallcap indices falling 0.4% and 0.22%, respectively.
“Markets oscillated in a narrow range on the budget day and settled marginally lower. The tone was positive at the beginning however profit taking emerged around the previous swing high. Consequently Nifty surrendered all its gains and finally settled closer to the day’s low at 21,697.45 level,” says Ajit Mishra, SVP - Technical Research, Religare Broking.
In the Sensex pack, 21 out of 30 stocks ended in negative terrain, led by Larsen & Toubro, UltraTech Cement, JSW Steel, Titan Company, Bajaj Finance, which dropped in the range of 1-2%. On the other hand, Maruti Suzuki India, Power Grid Corporation of India, Axis Bank, NTPC, and State Bank of India were among notable gainers.
Among individual stock, One 97 Communications (OCL), parent of Paytm, declined 20% after the Reserve Bank of India (RBI) imposed severe business restrictions on the payment services arm of the company. The central bank has directed Paytm Payments Bank to stop onboarding new customers with immediate effect, while it has been barred from taking further deposits or credit transactions or top-ups in any customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc. after February 29.
On the sectoral front, PSU and power index were top performers, while capital goods and realty space were among top laggards.
In the PSU space, state-owned banks were among top performers as they continued their gaining momentum for the sixth straight session on Thursday. Among the PSU lenders, UCO Bank, Bank of India, and Union Bank of India were top performers with more than 4% gain in each stock. Index heavyweights State Bank of India (SBI) and Bank of Baroda rose between 1-3%, while Punjab National Bank, Canara Bank and Central Bank added over 3% during the session so far. Shares of Indian Overseas Bank, Maharashtra Bank, and Indian Bank also gained up to 2%.
On the other hand, in the capital goods space, railway stocks witnessed broad-based selling. Shares of Railway-related stocks such as RVNL, IRFC, IRCON, IRCTC, RailTel, RITES, Texmaco Rail, Titagarh Railsystems, and others witnessed sharp correction after FM Sitharaman earmarked a capex of ₹2.55 lakh crore for the Indian Railways, which is marginally higher than the ₹2.4 lakh crore proposed in the Budget 2023, but lower than industry expectations of ₹3 lakh crore.
Rajesh Bhosale, Technical Analyst, Angel One, says, “In the upcoming session, the market may continue to respond to the aftermath of the budget announcement, with individual themes playing a significant role for traders seeking out performance opportunities. As the focus shifts from the key event, attention will revert to global developments, necessitating vigilance on the global front by traders.”
Vinod Nair, Head of Research at Geojit Financial Services, says that the domestic market was marginally disappointed by lower than expected infra spending in the interim budget. However, the government's commitment to fiscal prudence, targeting a fiscal deficit of 5.1% for FY25BE, is expected to improve the outlook on economic ratings. “This led to a significant drop in India's 10-year yield by 100bps to 7.04%, reflecting optimism due to lower-than-expected government borrowing. Meanwhile, the U.S. FED's decision to maintain rates without clear guidance on future cuts dampened market sentiments," he adds.
(DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)
