Ahead of Market: 10 Things That Will Decide Stock Market Action on Sunday
The Indian stock market experienced a dip on Friday as investors adopted a cautious approach ahead of the Union Budget. With benchmark indices like Sensex and Nifty retreating from recent highs, market sentiment remained defensively influenced.
– Market Overview: The Sensex closed down 296.59 points (0.36%) at 82,269.78, while the Nifty fell 98 points (0.39%), ending at 25,320.65.
Analysts interpret this market pulse as follows:
– Volatility Ahead of the Union Budget: Vinod Nair, Head of Research at Geojit Investments, emphasized that Indian equity markets showed considerable volatility leading up to the Union Budget. Sectors like IT and metals were particularly affected, with the IT sector lagging due to global growth concerns and rising U.S. bond yields. Additionally, the decline in gold and silver was noted amid a stronger dollar and persistent selling from Foreign Institutional Investors (FIIs).
– Geopolitical Risks: Nair pointed out that heightened geopolitical risks and increasing global tariffs mean the Union Budget is eagerly awaited for insights on growth support and fiscal discipline. Despite a temporary relief from a deal to avert a U.S. government shutdown, markets remain vigilant, especially with the potential appointment of a new Federal Reserve Chair, whose hawkish stance could tighten liquidity and impact emerging markets.
Key Factors Influencing Stock Market Action on Sunday
1. Global Cues: The influence of global markets is vital. Wall Street saw declines on Friday as President Trump’s selection of former Fed Governor Kevin Warsh—considered a hawkish choice—added to investor uncertainty. The Dow dropped 0.36% to 48,892.47, S&P 500 fell 0.43% to 6,939.03, and Nasdaq witnessed a 0.94% decrease to 23,461.82.
2. European Market Performance: European indices closed higher, marking their longest winning streak since 2021, driven largely by positive corporate earnings and investor reactions to political developments.
3. Technical Analysis: Shrikant Chouhan, Head of Equity Research at Kotak Securities, noted that the market displayed indecisiveness, trading between the 25,200/82,000 to 25,350/82,400 ranges. If the market remains above 25,200/82,000, positive sentiment may continue, with potential upward movement toward 25,500/82,800.
4. Stocks with High Turnover: Some of the most active stocks in terms of turnover included Hindustan Copper (₹7,917 crore), Vedanta (₹3,853 crore), and ICICI Bank (₹3,279 crore).
5. Volume Trading Trends: In terms of volume, Vodafone Idea led with 173 crore traded shares, followed by Hindustan Copper and YES Bank.
6. Stocks Showing Buying Interest: Market participants showed strong buying interest in stocks like Vodafone Idea and Tata Teleservices.
7. 52-Week Highs and Lows: Over 78 stocks reached their 52-week highs, including Nestle India and Axis Bank, while 291 stocks fell to their 52-week lows.
8. Market Sentiment: A bullish sentiment was present on Friday, with 2,424 stocks advancing against 1,783 that declined.
9. Federal Reserve Factors: Developments regarding the new Fed Chair and potential monetary policy changes will likely weigh on market action.
10. Sector-Wise Impacts: IT and metal stocks, particularly affected by global concerns, could either rebound or continue to drag on market performance, influencing overall sentiment headed into the budget announcement.
In conclusion, the upcoming Union Budget is pivotal for the stock market’s direction, as it may provide the necessary guidance and clarity that investors are currently seeking. Keeping an eye on domestic and global cues, while watching for the performance of key sectors, will be essential for anticipating market movements.