01 Feb , 2023 By : Monika Singh
Indian stock indices pared early gains, slipping into negative territory and finally ending on a mixed note amid volatility on the first day of February as budget excitement settled. During the day, the BSE Sensex jumped over 1100 points, touching an intraday high of 60,773.44 and NSE Nifty 50 surpassed the 17,970 mark but immediately after the FM’s speech finished, indices started falling. Markets have been volatile for the past few days as the Hindenburg-Adani saga shook investors’ sentiment. But today both the equity benchmark indices surged following the budget announcement by Finance Minister Nirmala Sitharaman, before crashing 1% towards the end of the trading session.
The BSE Sensex rose 158.18 pts or 0.27% to close at 59,708.08 and the Nifty 50 fell 45.85 pts or 0.26% to 17,616.30. In the sectoral indices, Bank Nifty fell 0.35%, Nifty Auto down 0.88%, Nifty Metal down 4.50% and Nifty Pharma fell 0.04%. Meanwhile, Adani Enterprises shares crashed 30% during the day, closing at Rs 2128.70. Most of the Adani Groups stocks hit a lower circuit.
Indices traded in a highly volatile range during the budget day, fluctuating between red and green. The investors initially cheered the budget as the Finance Minister didn’t announce anything negative related to markets but towards the end of the session, indices started falling as there was no positive news either. “Nifty ended in the negative on the Budget day on Feb 01 after a roller-coaster day. Broad market indices fell more as nervousness spread across the board as Adani group stocks once again came under pressure. Metal and IT sectors ended in the positive as these were viewed as defensive under the current situation. Nifty showed large volatility on Budget day (619 point range) which is not unusual. In the process, it made a new intra-day low. The US Fed meeting outcome is due this evening and could impact the Indian markets on Thursday; however, this kind of volatility may not be repeated. Nifty continues to face resistance at around 17760 levels, while support levels have now fallen to 17353,”
Adani Enterprises shares crashed over 30% to Rs 1942.00 on Wednesday. Most of the Adani Group stocks were locked in the lower circuit as the Hindenburg-Adani saga continued to dent investors’ mood, even though the Nifty 50 heavyweight’s follow-on public offer was fully subscribed a day before. Nifty 50’s fall today could be attributed to Adani Enterprises shares, as it is the index’ heavyweight while the Sensex constituents managed to recover losses pushing the index to close in the green territory. “Due to market instability brought on by persistent selling by international investors, both of our Benchmark Indices saw significant volatility. Sensex gyrates 2,000 points, Nifty falls due to stock losses at Adani, while VIX soars 11%. With a significant support level around 17450 and a resistance level of 18100, the Nifty has managed to maintain above its 200 EMA,”
Markets are keenly waiting for the US Fed meeting outcome which is scheduled to be announced today. Investors’ attention shifted from the budget to the US Fed’s decision on rate hikes quickly, as it will give insights into whether the global economy will slip into recession or not in near future. Market analysts believe that it could be the last rate hike by Fed chair Jerome Powell. Indian markets are expected to react strongly to the Fed’s decision on F&O expiry day, ie, Thursday. “Stock markets have reacted well to the provisions immediately due to the absence of any major unexpected negatives and adherence to fiscal prudence. The markets will now look forward to the other triggers for moving from now on – the US Fed meet outcome, RBI MPC meets outcome and the balance Q3 corporate results,”
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