Nifty: Ahead of two events, market analysts have advised investors against taking aggressive long positions and continue to retain a bearish stance. Benchmarks for equity Ahead of two significant events, the US Federal Reserve’s rate meeting and the 2024 budget, investors were cautious in their trading, and the Sensex and Nifty were trading flat on January 31 morning trades. The last five sessions have seen the market fluctuate between gains and losses, and the India VIX, a measure of market apprehension, was trading near 16 levels, indicating elevated market volatility.
At 9:35 a.m., the Nifty was trading a little higher than 21,550, while the Sensex was flat at 71,212.
Experts advise a bearish stance and warn investors against taking aggressive long positions before significant events. Sameet Chavan, Head of Research (Technical and Derivative) at Angel One, stated that if Nifty consistently trades above 21,750-21,800, it might favor the bulls, leading to levels between 21,950 and 22,100. However, he believes that any upward movement towards 21,750-21,800 is expected to encounter selling pressure before the crucial budget announcement. Finance Minister Nirmala Sitharaman is scheduled to present the interim budget for the fiscal year 2024-25 on February 1. The market anticipates a budget that leans towards the fiscal consolidation path, featuring moderate capital expenditure announcements.
Flat Sensex before Budget 2024, US Fed meeting; Nifty key level at 21,700.
Meanwhile, the broader markets surpassed the benchmark, with the Nifty Midcap 100 and Nifty Smallcap 100 indices gaining up to 1 percent.
In terms of sectors, there was slight profit-booking in the PSU Bank and Media indices, with declines of up to 0.7 percent. Conversely, the Nifty Auto index emerged as the top-performing sector, registering a gain of over 1 percent, driven by Tata Motors, M&M, Eicher Motors, and Maruti Suzuki. Chief Market Strategist Anand James of Geojit Financial Services foresees a continuation of weakness in morning trade on January 31. However, he anticipates a rebound by the bulls around the 21,481 region. James notes limited visibility beyond 21,640 for the day. On the other hand, a breach below 21,481 could potentially lead to levels of 21,200-20,900, although such a significant decline is less expected on this day.
Global markets are divided, with anticipation for a Fed rate cut tempered.
In the recent session, the US markets exhibited a mixed performance as investors awaited the Federal Reserve’s monetary policy stance. The NASDAQ Composite and S&P 500 indices, which are technology-heavy, experienced losses of up to 0.7 percent, while the Dow Jones added 0.3 percent. According to the CME FedWatch tool, the likelihood of a Fed rate cut in March decreased from 46.2 percent to 40.4 percent in the past day. Meanwhile, the probability of no rate cut rose from 52.9 percent to 58.8 percent during the same period.
Meanwhile, a majority of Asia-Pacific markets declined this morning as investors analyzed various economic data from the region, including reports from China and Australia.
