Indian equities traded flat on Thursday amid a status quo by the US Federal Reserve and a Budget speech that underscored the government’s resolve towards fiscal prudence.

The Sensex fell 106 points or 0.15 per cent to close at 71,645, while the Nifty settled at 21,697. Cash market volumes on the NSE were high at ₹1.35-lakh crore. Broad market indices fell a little more than the Nifty even as the advance decline ratio fell to 0.77:1.

Nifty saw the lowest intraday volatility on a Budget Day (0.80 per cent) in at least six years, as the expectation build-up ahead was limited, according to HDFC Securities.

Indian bonds rallied, with the benchmark 10-year yield falling by the most in more than a year, after the government announced a lower-than-expected borrowing programme.

FPIs sold shares worth ₹1,879 crore on Thursday, while domestic institutions bought shares worth ₹872 crore.

Among sectors, the PSU Bank index was the biggest gainer, rising over 3 per cent, while profit-booking was seen in digital and metal stocks, resulting in a decline of over 1 per cent in both indices.

The US Federal Reserve maintained status quo on Wednesday and did not hint at an early rate cut, which dented the mood a bit.

The Finance Minister emphasised the positive transformation of the Indian economy in the last decade in the Interim Budget and highlighted its continued focus on investing in infrastructure. Sectors such as affordable housing and finance, infra, railway, defence, and consumption would be the major beneficiaries, according to experts.

Sensex movement

The Sensex has gained in three out of the last five Interim Budgets. The Sensex rose 0.6 per cent on February 1, 2019. The index saw gains of 0.5 per cent and 2.4 per cent in 2014 and 2004, respectively. In 2009, the gauge saw a drop of 3.4 per cent.

The Sensex, however, has fallen on four out the last five occasions one month after the Budget, with the steepest drop of 7.7 per cent on July 5, 2019.

“With two major events now behind us, we expect markets to take support from the ongoing earnings season and should remain in positive territory,” said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services.

Asian shares were mixed on Thursday after Wall Street fell to its worst loss since September, as the Federal Reserve indicated interest rates cut were not imminent. Kospi, with gains of 1.8 per cent, was the top performer.

European stocks traded lower ahead of euro zone inflation data for January and the Bank of England’s latest monetary policy decision on Thursday.