Indian benchmark indices opened in negative territory on Wednesday as the Union Budget failed to impress market participants.
The Sensex commenced at 80,343.38, down by 85.43 points or 0.11%, while the Nifty 50 started at 24,445.00, lower by 34 points or 0.14%. The Bank Nifty also saw a decline, opening at 51,657.70, down by 120.60 points or 0.23%.
Sectoral performance was mixed; stocks in the Bank, Auto, Financial Services, IT, Pharma, Private Bank, Realty, and Healthcare sectors traded lower in the early hours. Conversely, FMCG, Media, Metal, PSU Bank, Consumer Durables, and Oil and Gas sectors showed resilience.
The market exhibited significant volatility during the Union Budget announcements. Despite closing marginally down, the last trading day saw buying interest in consumer durables, FMCG, and pharma sectors, driven by incentives proposed by the Finance Minister. The budget's focus on employment, skilling, and continued infrastructure spending influenced market movements.
Ajay Bagga, a banking and market expert, commented, “The overall budget has proved to be a non-event, with Indian markets experiencing fluctuations but eventually recovering. Domestic Institutional Investors (DIIs) purchased strongly, while Foreign Institutional Investors (FIIs) offloaded substantial amounts on Budget Day. DIIs are holding a massive Rs 125,000 crore in cash, which will be gradually allocated, providing market support. However, risks from global developments remain.”
Foreign investors emerged as net sellers in the Indian market on Tuesday, offloading stocks worth Rs 2,975.3 crore. In contrast, domestic investors were net buyers, investing Rs 1,418 crore, according to the National Stock Exchange (NSE) data.
Technical analysis suggests potential for a rebound, with the Nifty 50 forming a small negative candle with a long lower shadow, resembling a bullish hammer pattern. Despite recent volatility, the index has maintained levels above its 10-day and 20-day EMAs, indicating resilience, according to Varun Aggarwal, MD of Profit Idea.
Asian markets mirrored Wall Street's losses, with Japan’s Nikkei 225 and South Korea’s Kospi both trading lower on Wednesday. Hong Kong’s Hang Seng index futures pointed to a flat opening.
In the US, major indices closed slightly lower on Tuesday, influenced by earnings reports from Alphabet and Tesla. The Dow Jones fell by 57.35 points (0.14%) to 40,358.09, the S&P 500 decreased by 8.67 points (0.16%) to 5,555.74, and the Nasdaq Composite edged down by 10.22 points (0.06%) to 17,997.35.
Tesla shares dropped 2% in regular trading and an additional 8% in after-hours trading, while Alphabet saw a modest increase of 0.1%.
