Stock Market Special Trading Session: Indian stock market is open on Saturday, February 1, due to the Budget 2025 announcement by Finance Minister Nirmala Sitharaman during the day. Ahead of the Budget, the domestic equities recorded sharp surge with Sensex holding 77,500 mark and Nifty 50 floating above 24,500 zone. The two benchmarks saw its best week of January from 27th to 31st trading session. Will Indian stock market keep the positive momentum on the Budget day as well?
Sensex, Nifty:
On January 31, Sensex ended at 77,500.57 higher by 740.76 points or 0.97%, while Nifty 50 closed at 23,508.40 up by 258.90 points or 1.11%. From January 27th to 31st, Sensex and Nifty have witnessed 2.3% jump each.
Year-to-date, however, both the benchmarks are down by around 1% each. In a year, from last interim budget of February 1 to the upcoming budget 2025, Sensex has surged by 5,855.27 points or 8.17%, while Nifty 50 outperformed in percentage terms with gains of 1,810.95 points or 8.4%.
Explaining the latest week's surge, Vinod Nair, Head of Research, Geojit Financial Services said, the indices are fueled with expectations of a pro-growth budget and prudent fiscal as indicated in the economic survey. Positive global cues and better-than-expected results from major companies are also contributed to the upward trend. The market expects reductions in individual tax and job generation to boost consumption.
Nair added, "By cutting fiscal deficit but continuing to boost infrastructure spending, the government may set the tone for a potential recovery in the consolidating market."
How Sensex, and Nifty Perform On Budget Day?
Sunil Damania, Chief Investment Officer, Mojopms said, "As the Union Budget approaches, the critical expectation is to revive market sentiment. Recent budgets have seen increased taxation on the capital market-higher STT, capital gains taxes, taxation of dividend income in shareholders' hands, and the removal of tax benefits on buybacks."
Damania added, that this year, it's imperative for the Finance Minister to avoid introducing new taxes on investors. Instead, providing meaningful tax rebates to enhance consumer spending power could help revive the consumption cycle. Additionally, while higher capex allocations are welcome, the Budget should include clear quarterly timelines for actual spending. Without effective execution, increased allocations lose their impact.
While Prashanth Tapse, Senior VP (Research), Mehta Equities said, traders will be focussed on the Budget and steps the government will announce to boost the economy.
Key Triggers: Ajit Mishra - SVP, Research, Religare Broking said, Nifty has shown a remarkable rebound in recent sessions, surpassing its short-term resistance at the 20-day exponential moving average (DEMA). The index is now approaching the next critical hurdle at the 200 DEMA near 23,650, and a decisive breakout could pave the way for further gains toward the 23,900+ zone. However, with the Union Budget in focus, volatility is expected to remain elevated.
On the downside, Nifty is likely to find support in the 22,900-23,100 range in case of a pullback. Given the prevailing uncertainty, Mishra added, "we recommend maintaining a cautiously optimistic stance and favoring hedged positions until the event unfolds."
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