Sensex, Nifty rise over 1%; analysts predict more volatility ahead of Budget, US Fed rate decision

Benchmark Indian indices BSE Sensex and NSE Nifty 50 gained over 1 percent each on January 29 morning, supported by positive sentiment in Asian markets. However, analysts said that the volatile trend would continue to weigh on markets this week, ahead of the interim budget and US Federal Reserve’s interest rate decision.

At 10:50 am, the Sensex was up 1.1 percent to 71,497, while the Nifty 50 rose 1.1 percent to 21,603.

Going ahead, market experts suggested investors to monitor Nifty around the psychological mark of 21,000. “This week is crucial, aligned with the key Budget event, which typically sets the market direction. The Budget week is known for volatility, and considering the above formation, we lean towards the bearish side,” said Sameet Chavan, technical analyst at Angel One.

ALSO READ: Market Action | Six IPOs to hit Dalal Street, 10 listings lined up this week

In case of any negative surprises, Chavan said that Nifty might decline to 20,800 and even towards the bullish gap of 20,500. On the flipside, resistance is anticipated at around 21,750, he added.

Investors will keenly watch out interim budget announcements on February 1. The tone of the budget might leer towards fiscal consolidation but some capex measures are expected for railway, infrastructure, and consumption themes.

This week, the US Federal Reserve will also share its interest rate decision. Investors see the January meeting to be a prelude to interest rate cut measures. They expect the Fed to begin lowering the federal funds target range in March as it attempts to stick a soft landing.

Back home, broader markets also fared well on January 29 morning deals. Nifty Midcap 100 and Nifty Smallcap 100 indices surged up to 0.8 percent, while fear gauge India VIX soared over 10 percent to 15.

Apart from Nifty IT and Realty indices, all other sectors swimmed in the sea of green. Bank Nifty and Oil & Gas sectors led most of the gains as they were up over a percent on January 29 opening deals.

ALSO READ: Moneycontrol Pro Market Outlook | A rebound likely ahead of the interim budget 

Where is Bank Nifty headed?

Bank Nifty gained over 1 percent to 45,474 on Monday morning deals led by gains in IDFC First Bank, Bandhan Bank, Federal Bank, Kotak Mahindra Bank, and HDFC Bank.

HDFC Bank, which carries around 40 percent weightage in Bank Nifty index surged 2 percent after Life Insurance Corporation (LIC) got Reserve Bank of India’s (RBI’s) approval to increase its stake to 9.99 percent by January 24, 2025.

Going ahead, Mandar Bhojane said that if index advances, the initial key resistance is placed at 45,450, with subsequent levels at 45,700 and 46,000.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.