Sensex, Nifty fall for sixth day running, tank over 4% this week ahead of Budget

Equity benchmark indices closed deep in red for the sixth day running. Even though the benchmark indices began the day with gains, bears once again wreaked havoc on Dalal Street in the closing hours of the day’s trade. S&P BSE Sensex now sits at 46,285 points while the broader Nifty 50 is at 13,634. Volatility index, India VIX started the day in red but ended 4% higher, breaching 25 levels. Among sectoral indices, Nifty Bank, Nifty Private Bank, Nifty PSU Bank, and Nifty Realty closed with gains while others were deep in red. 

Rusmik Oza, Executive Vice President, Head of Fundamental Research at Kotak Securities –

“The Nifty-50 and BSE-30 Index declined 4.5% & 4.3%, respectively this week. The market mood has turned fragile as investors have become wary of risks from the upcoming union budget, and also selling by FIIs for three days in this week. International markets are also in correction mode due to new lockdowns being enforced in some countries and concerns over new strains of the Covid-19 virus. As per provisional figures FIIs have been net sellers to the extent of ~Rs.4000 cr in the first three days of this week, which means they could be taking some profits off the table before the Union Budget event.”

Vinod Nair, Head of Research at Geojit Financial Services –

“Weakening global trend due to the concerns of speculation and slowing economic recovery has hugely impacted the cautious pre-budget domestic market. The pace of recovery in the US and Europe has slowdown, having implication on Indian exports and FII inflows. In this waning domestic trend, Budget will be the key to provide strength and perform better compared to the rest of the world. Expectations are high that the government should maintain the populist & reformist agenda of maintaining the mass sentiments, deficit discipline and growth in difficult pandemic period.”

Ajit Mishra, VP – Research, Religare Broking –

“The economic survey failed to trigger the rebound in the markets and now all eyes would be on the Union Budget scheduled on Monday i.e. Feb 1. We believe that the budget would focus on reviving growth and any disappointment on that front would lead to further correction in the markets. We reiterate our view to prefer hedged bets before the event unfolds and avoid jumping into a trade until the market stabilises.”

Shrikant Chouhan, Executive Vice President (Equity Technical Analyst), Kotak Securities –

“The volatility is increasing and India VIX moved upward to 25.31, which is nearly 12 per cent jump in the fear index. The crucial supports would be at 13570/46100, 13440/45700 and 13250/45000 levels. However, closing below the levels of 13200/45000 would send the market to retest the previous all-time high level, which is at 12450/43000 levels. On the higher side, 14000/47200 and 14200/47800 would be major hurdles.  In the best-case scenario, we could see 14500/49000 levels and trend would turn extremely bullish if Nifty crosses 14800/50200. The strategy should be to reduce weak long positions between 14200/47200 and 14500/49000 levels. Buying is advisable if Nifty drops to 13500/46000 with a final stop loss at 13200/45000 levels.  The focus should be specifically on Financials, Pharmaceuticals and Commercial Vehicles.”

Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments –

“The markets were successful in breaking 13700 and has closed below it too. We could slide further to 13400 and thereafter to 13200. The fall has been backed by very high volumes especially in the last hour of trade. Any rally up can now be utilised to short the Nifty for lower targets. The resistance is now at 14000 and until that is not crossed, we will remain in the grip of the bears.”