Sensex, Nifty rally ahead of Union Budget, Fed outcome; Adani stocks mixed

Domestic equity markets opened higher on Wednesday ahead of the Union Budget, which will be tabled later in the day by the Finance Minister Nirmala Sitharaman. Traders will be looking for auto sales numbers, along with ministers' announcements, which are likely to give the booster dose of growth to the Indian economy.

On the other hand, the outcome of US Fed's policy meeting will be also on trader's radar. The United States' central bank is likely to increase interest rates by another 25 basis points amid the rising inflation worry. Also, its commentary will also be widely tracked by the investors across the globe.

At 9.25 am, BSE Sensex jumped 443.39 points or 0.74 per cent to 59,993.29, whereas NSE's Nifty50 index surged 132.20 points or 0.75 per cent at 17,794.35. Broader markets outperformed the headline peers as BSE midcap and smallcap indices rose over a per cent each. Fear gauge India VIX dropped 4 per cent to 16.22-level.

The Nifty staged a gradually recovery after initial decline as supportive efforts emerged from 200 days EMA. As a result, daily price action formed a small bear candle carrying higher high-low, Indicating continuance of upward momentum. The formation of lower shadow signifies elevated buying demand, said ICICIDirect Research.

"Going ahead, we expect volatility to remain high owing to the Union Budget session followed by US Fed meet. Amidst elevated volatility, we expect index to hold the key support zone of 17,500-17,300, as it is confluence of key long-term moving averages like 200 days EMA and 52 weeks EMA," it said.

All the sectors were trading higher in the early trading session. Nifty realty, private ban, financial services indices rallied over a per cent each. It was followed by metal, media and auto counters.

Adani Group stocks continued to remain at focus. Adani Total Gas and Adani Power were locked in the lower circuit of 10 per cent and 5 per cent, respectively. Adani Ports, Adani Green and Adani Transmission were also trading in red, whereas Adani Wilmar was up 2 per cent.

Britannia Industries topped the gainers in the Nifty50 pack, surging 3 per cent ahead of its quarterly results. ICICI Bank, Hindalco and Divis Labs jumped 2 per cent each. Tech Mahindra, Hero Motocorp, JSW Steel, Eicher Motors and Asian Paints also posted strong gains.

On the downside, Sun Pharma dropped 2 per cent, whereas Adani Enterprises and Bharat Petroleum shed a per cent on the back of profit booking. M&M, ITC, Ultatech Cement, SBI Life Insurance and Larsen Toubro were also trading lower.

The massive FPI selling in Indian markets have impacted market sentiments. NSDL data shows FPI selling of Rs 28852 crores in January. The actual selling in the cash market is a mammoth Rs 53887 crores in January. FPIs are selling in India and buying in cheaper markets like China, Hong Kong and South Korea where valuations are attractive, said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

"If the budget turns out to be good, with no unpleasant surprises, there can be short covering leading to spurt in the market. On the other hand, if there is some negative proposal like hiking the LTCGs tax to 20 per cent, FIIs will continue to sell, pushing the markets further down," he said.

In the broader markets, Apar Industries and Makasia extended its gains and rose up to 16 per cent each over Q3 results optimism. Cholamandalam Finance jumped 9 per cent following a strong performance in the December 2022 quarter. Borosil Renewables, Ques Corp and GTL Infra gained 8 per cent each.

Among the losers, there were not many notable names. Ajani Portland Cements, IFB Agro, Bengal & Assam Company, NACL Industries and Patanjali Foods dropped 3-5 per cent each.
 

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