Indian Stock Market Shows Positive Momentum Ahead of Union Budget
The Indian stock market is poised for optimistic trading as the nation awaits the Union Budget presentation on Sunday. This positive sentiment follows a rebound in the previous trading session and is further bolstered by encouraging projections from the Economic Survey. Market participants are entering this crucial period with heightened expectations, supported by both macroeconomic indicators and technical analysis.
Economic Survey Fuels Market Optimism
The recently released Economic Survey has provided substantial fuel for market optimism, projecting robust GDP growth of 7.4% for FY26 and a range of 6.8% to 7.2% for FY27. These projections are underpinned by several favorable factors including easing inflation trends, resilient domestic demand, and continued fiscal discipline maintained by the government. The survey's positive outlook has created a constructive environment for equity markets ahead of the budget announcements.
Budget Expectations Driving Market Sentiment
Market participants are closely watching for specific fiscal indicators in the upcoming Union Budget. Expectations include fiscal deficit guidance of 4.3% to 4.4% for FY27, alongside a continued decline in the debt-to-GDP ratio. Additionally, investors anticipate sustained public capital expenditure in the range of ₹12 to ₹12.4 lakh crore, representing approximately 3.1% of GDP. This continued focus on infrastructure development, defence modernization, electronics manufacturing, and industrial growth is supporting the medium-term growth outlook despite ongoing global economic challenges.
Technical Analysis Points to Upward Trajectory
Vaishali Parekh, Vice President of Technical Research at Prabhudas Lilladher, observes significant improvement in market sentiment as the Nifty 50 index sustains comfortably above the 25,000 level. According to Parekh's analysis, the Nifty 50 has demonstrated resilience after finding support near the 25,000 zone, gradually rising and sustaining above the crucial 200-period moving average at 25,180.
Nifty 50 Outlook: Parekh believes the index can continue its upward movement with a near-term target of 25,700, which aligns with the 50-period exponential moving average zone. The long-term trendline support at 25,000 remains a crucial level that needs to be sustained. Immediate support is identified at 25,300, while resistance stands at 25,600.
Bank Nifty Performance: The banking index has shown significant strength, moving past the 100-period moving average at 59,600 and closing near the 60,000 zone. This momentum has been led by frontline banking stocks including Axis Bank, ICICI Bank, and HDFC Bank, which continue to gain strength. The Bank Nifty is expected to trade in a daily range of 59,500 to 60,500, with near-term support at 58,800 and resistance at 60,300 that needs to be breached for further upward movement.
Stock Recommendations for Intraday Trading
Vaishali Parekh has identified three stocks with potential for intraday trading opportunities:
- JSW Energy: Buy at ₹459 with a target of ₹484 and stop loss at ₹448
- Tata Power: Buy at ₹366.45 with a target of ₹382 and stop loss at ₹358
- Chennai Petroleum: Buy at ₹874.85 with a target of ₹920 and stop loss at ₹855
The combination of favorable macroeconomic projections, positive budget expectations, and constructive technical indicators suggests that Indian equity markets are well-positioned for continued positive momentum as investors await the Union Budget announcements that will provide further direction for market movements in the coming weeks.
