More than 100 stocks gain between 10-47% in Budget week

The market snapped a two-week losing streak and posted the biggest weekly gains in the last two months in the volatile (Budget) week ended February 2 amid positive global cues, status quo from the US Fed, IMF-raised India GDP growth forecast, FIIs back into buying mood and expectation of no rate change by RBI in the upcoming monetary policy.

The Indian equity indices started the Budget week on a solid note but witnessed high volatility ahead of the FOMC meet outcome and Interim Budget while remaining mostly unchanged on the Budget day. However, strong gains on Friday helped Nifty to record ne high but witnessed some profit booking at higher levels.

This week, Nifty touched a fresh record high of 22,126.80 and ended with a gain of 501.2 points or 2.34 percent at 21,853.80, while BSE Sensex also inched closer to its all-time high of 73,427.59 and finished with a gain of 1,384.96 points or 2 percent at 72,085.63.

On the sectoral front, Nifty PSU Bank index surged 11.5 percent, Nifty Oil & gas index rose 9 percent, Nifty Energy index gained 8 percent and Nifty Metal, Auto, and Realty indices up 4 percent each.

Domestic institutional investors (DIIs) continued their support to the market as they bought equities worth Rs 10,102.62 crore during the week. On the other hand, Foreign institutional investors (FIIs) also shrunk their selling as they sold equities only worth of Rs 2,008.68 crore.

In January, the FIIs sold equities worth Rs 35,977.87 crore and DIIs bought equities worth Rs 26,743.63 crore.

“Markets rebounded after spending two weeks in a corrective phase and gained ~2%, thanks to favorable cues. The tone was positive for most of the week citing favorable global cues and buying in select heavyweights however underperformance of banking majors continues to weigh on the sentiment. Among the benchmark indices, Nifty managed to retest its record high but eventually settled at 21,853.80 levels,” said Ajit Mishra, SVP – Technical Research, Religare Broking.

“All the key sectors participated in the move wherein energy, metal, and auto were among the top performers. Interestingly, the broader indices continue to positively surprise despite the overbought reading and gained in the range of 2.7 percent -5.6 percent respectively,” he added.

The BSE Small-cap index added 3.3 percent in this week, to hit a fresh high of 46,169.7 on February 2. NBCC (India), Shakti Pumps (India), Punjab & Sind Bank, KPI Green Energy, Hemisphere Properties India, Infibeam Avenues, IRB Infrastructure Developers and India Tourism Development Corporation added 31-47 percent.

On the other hand, Ramky Infrastructure, Oriental Carbon and Chemicals, ZF Commercial Vehicle Control Systems India, Craftsman Automation, and Rane Madras shed 10-12 percent.

Where is Nifty50 headed?

Rupak De, Senior Technical Analyst, LKP Securities

Nifty surpassed the 22,000 mark during the first half of the Friday session but subsequently formed a double top on the hourly chart. Confirmation of a bullish trend resumption would only occur with a decisive breakout above the double top, which is currently identified at around 22,125.

Conversely, a break below the support level at 21,500 could indicate a bearish momentum. In the scenario of a breakout above 22,150, Nifty may experience upward momentum, potentially reaching levels such as 22,500 and beyond.

Jatin Gedia – Technical Research Analyst at Sharekhan by BNP Paribas

The daily and hourly momentum indicators provide a divergent signal and prices are stuck within a range. Bollinger bands are contracting indicating range-bound price action. Thus, parameters suggest that the consolidation is likely to continue. Stock-specific action and sector rotation are likely to continue during this period of consolidation. Key support levels are 21,660– 21,600 while the immediate hurdle zone is placed at 22,100-22,150.

Bank Nifty witnessed selling pressure from the 46,900–47,000 zone which coincided with the 61.82 percent Fibonacci retracement level of the entire fall it has witnessed from 48,636–44,429. The Bank Nifty is likely to enter into a consolidation phase in the range 47,000–45,500 from short-term perspective.

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