Major volatility unlikely ahead of Budget

Buoyed by moderate domestic inflation data, expected US Fed meeting outcome on the back of US and domestic inflation, positive global markets and renewed FIIs buying; the domestic stock markets extended the winning run for the second consecutive week with benchmark indices hitting fresh record highs during the week ended. BSE Sensex added 299.41 points or 0.39 percent to finish at 76,992.77 points, while NSE Nifty gained 175.45 points or 0.75 per cent to end at 23,465.60 points. During the week, the Sensex and the Nifty touched their fresh record highs of 77,145.46 and 23,490.40, respectively.The BSE Small-cap index surged five per cent and touched a new record high of 51,259.06. The BSE Mid-cap Index hit a fresh high of 46,088.09 and gained 4.4 percent.

A narrow rally from here on till Union Budget leaves the market vulnerable if a few of the biggest companies can’t meet the lofty expectations priced into their valuations for Q1 results. In the near-term, the market is likely to be range bound since there are no major triggers till the Union Budget. Market participants would be keenly tracking the release of the 100-day plan of various ministries. Last week, the Defence Ministry’s announcement of increasing military exports to Rs50,000 crore sparked a rally in defence stocks. This week will be a holiday-shortened one as the market will be shut for trading on Monday due to Eid celebrations.

F&O / SECTOR WATCH

On the back of narrow rally with weak strength, the derivatives segment witnessed erratic volumes in both index and stock futures. Old timers feel that the markets have been driven much more by greed recently than by fear.

STOCK PICKS FOR 2024

CIE Automotive India Ltd is part of the CIE Automotive Group of Spain and is the CIE Automotive Group’s vehicle for its forgings business globally. The company is a multi-locational and multi-technology automotive components company with manufacturing facilities and engineering capabilities of its own and its subsidiaries in India and in Germany, Spain, Lithuania, and Italy in the European continent as well as a plant in Mexico, North America. 

(The author is a senior maket analyst and former vice- chairman, Andhra Pradesh State Planning Board)