New Delhi: Following a period of recovery from the losses incurred post-budget, the Indian stock market concluded its week on a positive note, marking the first green close in five consecutive trading days.
The Sensex reached a green milestone at 81,332.72, an increase of 1,292.92 points, or 1.62 per cent, while the Nifty climbed to 24,834.85, an increase of 428.75 points, or 1.76 per cent, after hitting an all-time high of 24,853.10 points. All sectors of the market reported positive performance on Friday.
Over the past few days, the indices have experienced significant losses due to substantial profit-taking following the announcement of increased tax on derivatives trading and capital gains. Additionally, lower-than-expected earnings growth from major banks have put pressure on the markets.
Market analysts believe that the eagerly anticipated budget did not have a significant impact on the market, as observed on the day of the Union Budget announcements on July 23, which saw considerable volatility.
Reflecting on the day's trading, Ajay Bagga, an expert in banking and markets, noted a rally in the Indian markets, with both broad and frontline indices showing impressive recovery. The focus now shifts to the India growth narrative and global indicators, with a potential technical rebound. Key levels need to be sustained before a definitive conclusion can be made. In the meantime, liquidity has emerged as the dominant factor, pushing the bulls to the forefront and relegating the bears to the sidelines.
The stock market opened the day with a marginal gain but saw substantial gains throughout the day.
"On the day of the Union Budget, the benchmark indices, Nifty and Sensex, initially saw profit-taking, which led to a decline in both indices. However, both indices recovered after volatility subsided, and the budget was perceived as positive for long-term economic growth, forming a bullish hammer candlestick pattern in the daily charts," stated Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Intermediates Ltd.
"There's a possibility that over the next ten days, the market could achieve a new record high, potentially reaching the 25,000 mark before experiencing a minor correction. During this period, sectors such as Energy, Metal, Media, IT, Banks, and Infrastructure are expected to garner the most attention," said VLA Ambala, Co-Founder of Stock Market Today (SMT).
Ambala remains optimistic about the market's upward trajectory, suggesting that dips should be viewed as potential buying opportunities. "However, given the current high valuations, it is advisable to wait for a dip before making any decisions. The market has already presented such an opportunity on the recent Union Budget Day, with the market showing a lower price rejection below the 24,200 mark," he added.
