Indian benchmark indices, Sensex and Nifty, are likely to open flat on Thursday, as market participants will keenly watch the Interim Budget. Though Finance Minister Nirmala Sitharaman has reiterated it will be only a vote on accounts, expectations of (personal tax tweaks and concessions to some industries) have crept in.

Global markets are down, as the US Federal Reserve remained status-quo on interest rates. There was wide expectation that the Fed would cut the rate.

Gift Nifty at 21,821 indicates a flat opening for Nifty and Sensex, as Nifty futures on Wednesday closed at 21,808.60

“The recent correction from the high has been mainly because of FIIs selling in cash and the index futures segment, and still, they have significant positions in the index futures on the short side. Now, markets would be reacting to a couple of events in the coming session, i.e., the FED Policy outcome and the Interim Budget. It would be crucial to see which side the index gives a breakout. A closing above 21800 could lead to a continuation of the uptrend where the index can then rally to mark a new record high again,” said Ruchit Jain, Lead Research,

On the flip side, he cautioned that the above-mentioned moving average support at 21300 remains a crucial support for the index.

According to analysts, continuous selling by foreign portfolio investors will impact the short-term stock movement. Analysts expect the selling to continue with the US Fed remaining firm.

India VIX at 16.04 signals that uncertainty is ahead, and the market may witness correction.

According to DSP Mutual Fund, while India offers an exceptional long-term investment opportunity, investors should remain vigilant considering a shifting landscape marked by decelerating global growth, rising global interest rates, persistent near-term dollar strength, and heightened geopolitical uncertainties.

“While India, with its primarily domestically driven growth, is expected to be relatively less susceptible to global macro risks in this changing environment, expectations need to be appropriately set for the current year on back of rich valuations,” it cautioned.