Rally in later part of the week helped Indian equity benchmarks to end in green and reclaim their crucial levels, as the market gave thumbs up to the Union Budget 2023-24. For the day, the 30-share pack BSE Sensex rallied 909.64 points, or 1.52 per cent, to 60,841.88, whereas Nifty50 Index settled at 17,854.05, rising 243.65 points, or 1.38 per cent. However, broader markets underperformed as BSE midcap and smallcap indices settled in red. India VIX dropped sharply about 9 per cent to 14.4-level.
Market watcher Vinod Nair, Head of Research at Geojit Financial Services, said: “The domestic market showcased all the thrills of an eventful week and swung with great volatility between gains and losses. The Adani saga has created large turbulence during the week, and as a result, the market failed to shy away from its instability even after a well-tuned Budget that placed strong emphasis on consumption and capex. Despite the drop in crude prices and upside in global markets, the premium valuation of India continued to weigh down the performance of the domestic market compared to other emerging markets, which are expecting upside in the economy.”
“However, a relief rally was seen towards the end of the week following the central banks’ commentary indicating an end to the rate hike cycle in the near future. The uptick in Adani Group stocks following the confident statement by Total Energies, a large French energy company, also raised the sentiment of the market. Global markets also rejoiced in less hawkish commentary from central banks; however, they witnessed selling towards the end of the week due to the weak results of global IT giants. In the upcoming week, a major trigger in the domestic market would be the RBI’s rate decision and their commentary on future rate actions, where the market is widely expecting a rate hike of 25 basis points.” he added.
Traders took some encouragement when Chief Economic Advisor (CEA) V A Nageswaran said India has the potential to grow at 6.5-7 per cent and will become a $5 trillion economy by 2025-26 and $7 trillion by 2030 depending on exchange rate fluctuation. Along with this Central Board of Indirect Taxes and Customs (CBIC) chief Vivek Johri has said that monthly GST collection is expected to average around Rs 1.50 lakh crore and it will be the new normal in FY24. These statements have boosted the market sentiments. These signals led the BSE Sensex to jump 1,511 points, or 2.5 per cent, at 59,330.90 during the week ended February 03, while the Nifty increased 250 points, or 1.4 per cent, to 17854.05.
As many as 28 stocks in the Nifty 50 index delivered a positive return for investors in the week ending February 03, 2023. With a gain of 11.8 per cent, Shree Cement emerged as the top gainer in the index. It was followed by ITC (up 10.1 per cent), Ultratech Cement (up 7 per cent), ICICI Bank (up 5.7 per cent) and Titan Company (up 5.6 per cent). Britannia Industries, Infosys and Mahindra & Mahindra also advanced over 5 per cent. On the other hand, Adani Ports and Special Economic Zone, HDFC Life Insurance and Divi’s Laboratories declined 16.7 per cent, 16.6 per cent and 14.8 per cent, respectively. Sector-wise, the BSE Teck index gained the most (3.1 per cent) during the week gone by. While BSE FMCG and BSE Information Technology indices have also given a 2.9 per cent return each. While on the down side BSE Power, BSE Oil & Gas and BSE Healthcare indices have registered a weekly decline of 10.5 per cent, 9.5 per cent and 2.3 per cent, respectively.
Kunal Shah, Senior Technical Analyst at LKP Securities, said: “The Bank Nifty bulls came back strong, and the index witnessed a sharp bounce back from the lower levels. The index’s immediate support on the downside stands at the 41000-40800 zone, and one should keep a buy-on-dips approach. The upside hurdle continues to be at 42000, where the highest open interest is built up on the call side.”