Indian Stock Market Retreats as Budget Anticipation Builds
The Indian stock market experienced a downturn on Thursday, with the benchmark indices Nifty 50 and Sensex moving lower after a flat opening. This shift followed two consecutive days of gains, which were largely driven by optimism surrounding a recent trade agreement with the European Union. Investors are now turning their attention to the highly anticipated budget, scheduled for revelation on Sunday, which is expected to provide crucial insights into economic growth and corporate profitability in the world's fastest-growing major economy.
Market Performance and Key Indicators
At 9:15 AM IST, the Nifty 50 showed a marginal increase of 0.01%, reaching 25,345, while the BSE Sensex edged up by 0.03% to 82,368.96. However, this early positivity was short-lived as selling pressure intensified later in the session. In a significant development, the Indian rupee touched an all-time low of 92.00 against the US dollar during early trading hours, reflecting broader economic uncertainties.
On the commodities front, February futures for MCX gold witnessed a dramatic surge, climbing by nearly ₹10,000 or 6% to achieve a historic high of ₹1,75,869 per 10 grams. Similarly, March futures for MCX silver jumped by ₹21,500, approximately 6%, reaching a record peak of ₹4,06,863 per kilogram. These movements highlight a strong safe-haven demand amid market volatility.
Global Market Context and Federal Reserve Decision
Globally, Asian markets presented a mixed picture, while US stock indices mostly advanced overnight. This uptick followed the US Federal Reserve's decision to maintain interest rates at current levels, a move that was widely anticipated by financial analysts. The steady rates provided some stability to international markets, though domestic factors continued to dominate investor sentiment in India.
Technical Analysis and Market Outlook
According to Osho Krishan, Senior Analyst of Technical & Derivatives at Angel One, the Indian equity markets have demonstrated notable resilience with robust participation across sectors. The Nifty 50 index managed a positive closure for the second consecutive session, gaining 0.66 percent and settling around the 25,350 mark. A surge in buying activity during the penultimate hour of trading played a pivotal role in securing this favorable outcome.
The advance-decline ratio currently exhibits a strong bullish bias, hinting at a potential 'Budget Rally' in the days ahead. Technically, the 14-day RSI has shown a positive crossover, and with the Nifty 50 hovering near the critical support of the 200-day Simple Moving Average (SMA), there is potential for a bullish reversal. However, Krishan cautions that the market is not yet fully stabilized, advising a prudent approach.
Key levels to watch:
- Support: The 25,150 mark (200 DSMA) is expected to buffer short-term fluctuations, with the 25,000-24,900 range acting as a sacrosanct support zone.
- Resistance: The 25,450-25,500 range may present an intermediate obstacle; a decisive breakout above this level could reignite buying interest.
Krishan emphasizes that the domestic market is poised to gain momentum during the Budget week. Investors should focus on specific stocks and themes likely to exhibit anticipatory movements and stay informed about global and macroeconomic trends that could trigger short-term fluctuations.
Stock Recommendations for Thursday
Osho Krishan of Angel One has recommended two stocks for consideration on Thursday:
- Apollo Micro Systems Ltd: This stock has seen a significant decline from its all-time high of 355 and is now positioned near the 200-day Exponential Moving Average (DEMA), aligning with a breakout neckline. Recent sessions have shown a strong rebound from oversold conditions, supported by positive divergence in price and the 14-day RSI, reinstating buying momentum. The risk-reward ratio appears favorable, suggesting strong near-term momentum.
- Indian Railway Finance Corporation Ltd (IRFC): IRFC has rebounded from historical support around 110 and surged towards short-term EMAs, indicating a counter-trend onset. Technically, the 14-day RSI has displayed a positive crossover from sub-oversold territory, pointing to a potential pullback. Anticipatory moves ahead of the Budget session are likely to add a favorable quotient to this counter.
Disclaimer: The views and recommendations above are those of individual analysts, experts, and broking companies, not of Mint. Investors are advised to consult certified experts before making any investment decisions.
