Mumbai: The Indian stock market concluded Wednesday's trading session on a high note, with benchmark indices experiencing a significant rally in anticipation of the monthly expiry and the forthcoming Union Budget session. The market had also shown positive momentum on Tuesday.
The Sensex rose by 631.55 points, finishing at 76,532.96, while the Nifty increased by 205.85 points, closing at 23,163.10.
Among the Nifty 50 constituents, 42 stocks saw gains, whereas nine experienced declines. Leading the gainers were Shriram Finance, Bharat Electronics Limited (BEL), Tata Motors, SBI Life, and Trent, while the top decliners included ITC Hotels, Maruti Suzuki, Asian Paints, Bharti Airtel, and Britannia.
VLA Ambala, Co-Founder of Stock Market Today, commented on the market dynamics, noting that investors are increasingly concentrating on stock-specific movements as the budget approaches.
She observed that value buying is being pursued during the current dip, with market sentiment buoyed by elevated expectations.
Ambala stated, "With the budget session imminent and high expectations prevailing, stock-specific movements are gaining traction as astute investors seek value buying amid the current dip. Additionally, tomorrow marks the monthly expiry for all major indices, which may result in a broad yet volatile trading range. In this context, market participants should consider adopting neutral strategies to navigate volatility."
From a technical perspective, Ambala pointed out that the Relative Strength Index (RSI) for Nifty has decreased to 60 on the monthly timeframe, suggesting the potential for further corrections in the weeks ahead.
"Moreover, the market may experience a pullback before the budget announcement, so investors should strategize accordingly. The RSI for Nifty has cooled to 60 on the monthly timeframe, indicating the likelihood of further corrections that could test its 20-month EMA, a significant level for investing in index ETFs," she added.
Nifty has exhibited a doji candlestick pattern in today's trading session, with the RSI recorded at 42. This situation suggests a prudent approach to buying at significant support levels while adopting a neutral outlook. Given the current market dynamics, the benchmark index is likely to find support between 23,000 and 22,860, with resistance anticipated around 23,260 and 23,380 in the next trading session.
Market sentiment is being influenced by several factors. The anticipation surrounding budget announcements is keeping traders vigilant, with expectations varying across different sectors affecting stock performance.
Additionally, the forthcoming derivative expiry is likely to introduce short-term volatility. Technical indicators point towards a possible correction, leading experts to advise a careful yet tactical trading strategy in the days ahead.
As the market responds to these critical developments, investors are concentrating on forthcoming economic indicators to fine-tune their investment strategies and take advantage of market fluctuations.
