Indian stock markets opened slightly higher on Saturday, the day of the Union Budget, with investors adopting a cautious approach as they awaited announcements from the Finance Minister amidst mixed global cues and recent selling pressure from foreign investors.
The Sensex opened higher at 77,637.01 compared to its previous close of 77,500.57, and is currently trading at 77,635.33, up by 134.76 points or 0.17 percent. Similarly, the Nifty opened at 23,528.60 against its previous close of 23,508.40 and is currently at 23,544.90, gaining 36.50 points or 0.16 percent as of 9:40 am.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said, “On the Budget day, the market reactions will be quick in response to Budget announcements. A major expectation from the Budget is a cut in personal income tax to provide relief to the middle class and boost consumption, thereby facilitating growth recovery.”
Market sentiment was partially influenced by the Economic Survey 2025 presented the day before, which projected India’s GDP growth for FY26 at 6.3-6.8 percent. The survey also highlighted positive indicators such as a decrease in the unemployment rate to 3.2 percent in 2022-23 and stable gross FDI inflows.
Shrikant Chouhan, Head Equity Research at Kotak Securities, noted, “Today, on the first day of Expiry and ahead of the Union Budget, the market climbed and closed above the level of 23500, which is a positive sign.” He highlighted increased buying interest in budget-sensitive sectors like Defense, Railways, Infrastructure, and Realty.
Leading the gains on NSE were ITC Hotels, up by 3.06 percent, followed by IndusInd Bank at 2.86 percent. Other major gainers included Mahindra & Mahindra (+1.94 percent), Bharat Electronics Limited (+1.88 percent), and UltraTech Cement (+1.56 percent). On the flip side, Hero MotoCorp declined by 1.11 percent, followed by Dr. Reddy’s (-1.10 percent), Shriram Finance (-0.70 percent), Wipro (-0.69 percent), and Grasim (-0.67 percent).
The India VIX, a measure of market volatility, showed signs of easing, trading at 16.24 after falling nearly 6.57 percent in the previous session, indicating reduced anxiety among investors ahead of the budget announcement.
Foreign institutional investors (FIIs) continued to be net sellers on January 31, offloading equities worth Rs 1,188.99 crore, while domestic institutional investors (DIIs) bought shares worth Rs 2,232.22 crore.
Vijayakumar added, “The market will be looking for growth stimulating measures; not market-related taxation reliefs like changes in the capital gains taxation. The market response to the Budget will not last more than a few days.” He emphasized that the long-term market direction would depend on growth and earnings recovery trends.
Technical analysts suggested key support levels for Nifty at 23,400, 23,300, and 23,200, with resistance levels seen at 23,600, 23,700, and 23,800. For Bank Nifty, support levels were placed at 49,300, 49,000, and 48,800, with resistance at 49,700, 50,000, and 50,300.
Hardik Matalia, Derivative Analyst at Choice Broking, advised, “Traders need to remain cautious ahead of the Union Budget, as high volatility is expected. However, buying on dips can be considered as long as the Nifty index holds above the 23,200 mark.”
Market experts anticipate this year’s budget to focus on core capex investment in sectors such as infrastructure, renewable energy, defense, manufacturing, and technology, which could potentially influence market sentiment and specific stock performances in these sectors.
The article was first published on February 1, 2025.
