Markets are expected open positive on Wednesday, as the big day has arrived. Everyone’s focus is now on the Budget, which will be presented at 11 am by Finance Minister Nirlama Sitharaman. According to experts, as uneasy expectations have already crept in from every quarters, the challenge is big for the finance minister.

SGX Nifty at 17,850, indicates a positive opening for the market, as Nifty futures on Tuesday closed at 17,798. Analysts expect the benchmarks to hover in a narrow range ahead of the Budget presentation. Thanks to positive news flow such as GST collections (₹1.55 lakh crore), core sector output (7.4 per cent) and the success of the mega ₹20,000-crore follow-on public offer of Adani Enterprises, experts believe markets got the much-needed stability factors.

Markets are likely to see some volatility on Budget day. Any constructive announcement by the government in the Union Budget can take the market higher.

“The focus would be largely growth-oriented with emphasis on further development of infrastructure like roads, railways, water, metro cities. Further, a lot of emphasis would be laid on renewable energy in order to reduce the energy cost to GDP with more incentives being announced to push solar power, EV, public transport, etc. Thus, a lot of stock-specific action will be seen in these sectors,” said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

‘Strong show’

Asian stocks are also up in early deal on Wednesday in the range of 0.1-0.5 per cent, thanks to a strong show at the US stocks overnight.

According to Edward Moya, Senior Market Analyst, The Americas OANDA, US stocks are rallying after some standout earnings and economic data that suggest disinflation trends should remain in place for a while. “Wall Street is slowly growing confident that this week’s Fed rate hike might end up being the last one in this tightening cycle,” he added.

However, the continuous selling by foreign portfolio investors in domestic markets is a cause for concern, said analysts.

FII’s have been on the bearish side for the last few days as they have been selling in the cash segment and in the index futures segment too, said Ruchit Jain, Lead Research, 5Paisa Capital. “They have just about 18 per cent of the positions on the long side in the index futures segment, and it needs to be seen if any positive trigger leads to short covering by them,” he said. “The volatility could remain high and hence traders should trade with proper risk management.”

Related Topics