Trading strategy budget 2024: Next Thursday, February 1, the Indian Finance Minister, Nirmala Sitharaman, will unveil the Interim Budget for FY24–25. Market analysts note that during the past several years, the budget’s influence on the equities market has been drastically reduced because most changes have been implemented by the government outside of the budget’s purview. However, market participants continue to view it as an important driver supporting the growth of the Indian economy and, consequently, the Indian market.
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Markets are currently choppy after an upward trend spanning several months. A lot has also transpired in the month of January. Selling has been rampant among foreign institutional investors (FIIs). FIIs had sold net worth of ₹33,633 crore in January so far. Amidst attacks in Yemen, WTI Oil saw a rise to $74.75 per barrel. It is becoming less likely that US rates will drop soon. In the last month, experts have seen a decline in the odds on a rate decrease at the Federal Reserve’s (Fed) March meeting, from 76% to 41%.
It appears like investors are in for an interesting ride, beginning next week with the release of the interim budget and continuing through the Federal Open Market Committee (FOMC) meeting scheduled for January 30-31, 2024.
Amit Trivedi , CMT. Vice President – Research at YES Securities, discusses trading strategies, crucial market levels, and the sectors and stocks to be on the lookout for this eventful week.
Nifty key levels to watch out during the eventful week
Following a multi-month uptrend, markets have turned volatile in the recent past. The Nifty 50 has failed to provide a close above 21600, while on the flip side, the index has managed to stay above its 50-day average. Further choppiness is expected in the coming eventful week; a decisive breakthrough on the either side of the 21,000 (50 SMA)-21,600 range is essential for trending moves to emerge.
Since the start of the month, Bank Nifty has underperformed the benchmark index; recoveries remained short-lived, and eventually Bank Nifty faced sharp downticks (down ~8%) in the January series. A positive breakthrough and sustenance above 45,500 levels are required for any meaningful recovery to set in. Overall, mixed action among the banking stocks is expected.
Sectors to watch out
Historically, it has been observed that during the interim union budget, markets have a tendency to witness whipsaw moves; sectors and industries like infrastructure, finance, hotels, railways, and manufacturing are likely to see higher price volatility and volume pick-ups. Ideally, one should wait for volatility to subside and accumulate stocks that are showing comparative strength.
Stocks to watch out
The overall structure of cement stocks looks promising; hence, a decline in stocks like JK cement, Dalmia Bharat and Ambuja cement should be considered a buying opportunity. The outlook is neutral on metals, FMCG, and IT, while stock-specific corrections within the auto sector are expected.
Also Read: Budget 2024: Trading Strategies by Geojit Financial Services
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.
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Published: 25 Jan 2024, 05:25 PM IST