Interim Budget, Fed outcome among key factors that will guide Dalal Street on D-Day

Domestic stock indices are likely to open higher on Thursday ahead of the interim Budget 2024. The BSE Sensex had on Thursday gained 612.21 points, or 0.86 per cent, to settle at 71,752.11. The NSE Nifty was up 203.60 points, or 0.95 per cent, at 21,725.70 on Wednesday. Here are the major factors that will guide action on the Dalal Street on Thursday:

Fed stays status quo on rate
The US Federal Reserve decided to keep interest rates steady on Wednesday. The US central bank emphasised that despite some progress, inflation risks persist and dispelled expectations for an interest rate cut in March. This statement, meanwhile, removed a longstanding mention of potential future increases in borrowing costs.

Interim Budget announcement
Finance Minister Nirmala Sitharaman will present the interim budget on Thursday, February 1. This marks the final budget of Modi Government 2.0 ahead of general elections. The domestic market will closely follow the interim budget, especially any proposals related to LTCG, disinvestment plans, capex in infra sector and fiscal discipline.

India's economic data
Two key economic indicators were released ahead of the Budget. January witnessed a noteworthy upswing in GST collections, reaching a second all-time high of over Rs 1.72-lakh crore. The fiscal deficit hit 55 per cent of the budget estimate for the April-December period. But the output growth of eight core industries plummeted in December 2023, reaching a 14-month low of 3.8 per cent.

Weekly F&O expiry
Weekly Nifty futures and options contracts will expire today, adding to the likely volatility in the market. Angel One in its latest technical report on interim Budget 2024 said the prevailing undertone favours the bulls and that any dip is likely to augur well for them.

The domestic brokerage said a conservative approach is advisable for Nifty traders after the recent rally, saying they should remain selective in their approach, emphasising more on the themes poised for outperformance, said Angel One. "21,200-21,000 zones are to be treated as immediate support. On the flip side, the 22000 mark is likely to be seen as an intermediate hurdle," it said.

Key earnings
Adani Group-owned bluechips including Adani Enterprises and Adani Ports & Special Economic Zone will announce their earnings for the December 2023 quarter today. A notable earnings from the Nifty50 pack includes Titan Company.

Asian markets

Asian shares fell, following a late decline on Wall Street. Despite delays in the rate cuts, investors remained committed to expectations of substantial cuts in US interest rates later in the year. The final trading day of January saw a significant drop in US stocks, with all three experiencing extended losses following the Federal Reserve's announcement and Chair Jerome Powell's subsequent press conference.

Also read: Budget 2024 live: FM's speech at 11 am, taxpayers, investors wait with bated breath

Also read: Cigarette stocks ITC, Golden Tobacco, Godfrey Phillips India and VST Ind in focus. Here's why