It was another volatile Budget day for the Indian stock markets, but with a slight difference. The Indian benchmark indices, the Sensex and Nifty 50, opened with a gap-up and broadly remained stable for most part of the first half of the day. The indices went up towards the end of the Finance Minister’s speech to make the day’s high. Sensex made a high of 60,773.44 and Nifty 50 touched 17,972.20. But thereafter, the indices witnessed a sharp fall giving back all the day’s gains. The reversal was likely triggered by the news that Credit Suisse will stop accepting Adani Group’s bonds as collateral for lending, and fall in insurance stocks post the Budget speech. Sensex and Nifty tumbled to a low of 60,001.7 and 17,353.40 respectively. However, the Sensex and Nifty managed to recover from their lows and closed the day at 59,708.08 and 17,616.30, respectively. Sensex was up 0.27 per cent, while the Nifty was down 0.26 per cent.

Among the sectoral indices in the BSE, the Metal, Information Technology and FMCG indices managed to close in green. The others closed the Budget Day in red. The BSE Services Index was beaten down the most. That was followed by the BSE PSU and BSE Infrastructure index.

Sector gainers

The BSE FMCG index outperformed by gaining 0.77 per cent followed by the BSE Information Technology index, which was up 0.73 per cent. The stock of ITC recovering sharply from its intraday low drove the BSE FMCG index higher. ITC tumbled over 6 per cent to make an intraday low of ₹329 after announcement of an increase in the National Calamity Contingent Duty on specified cigarettes. However, the stock made a sharp recovery from its low to close the day higher by 2.61 per cent. Varun Beverages, up over 2 per cent, also contributed to the gains in the FMCG index.

Sector losers

Bringing the life insurance policies (moneyback or endowment) with annual premium over ₹5 lakh under the tax net knocked down the insurance company stocks. That had dragged the BSE PSU index down by 3.18 per cent. General Insurance Corporation of India (down 12.4 per cent) and Life Insurance Corporation of India (down 8 per cent) were beaten down the most in the BSE PSU index.

Adani Ports tumbling 20 per cent was the major contributor for the fall in the BSE Services and BSE Infrastructure indices.

What next?

On the charts, the crucial supports on the Sensex and Nifty have held very well; 17,400-17,300 on the Nifty and 58,500-58,000 on the Sensex are the critical supports that are holding well. A strong follow-through rise from here surpassing 18,000 on the Nifty and 61,000 on the Sensex will be bullish from a long-term perspective. Such a move can take the Nifty up to 19,500-20,000 and Sensex to 63,000-64,000 over the medium term. The indices will come under threat only if they fall below 17,300 (Nifty) and 58,000 (Sensex).

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