Nifty settles above 11k as markets eye budget

Will India’s broad index pause as the budget session kicks off this week!!

The Nifty rallied to fresh peaks last week to settle above 11,000, surging close to 2 percent for the week and 5.5 percent in January. The broad index comprising of the fifty largest listed companies in terms of market capitalization registered the largest monthly gains since March 2015 before pulling back about half a percent after testing key retracement levels at 11,110.

The budget session of the Parliament begins on 29th January 2018 with the budget announcement for 2018- 2019 expected on 1st February 2018. Being the last full- fledged budget of the present Government before national elections kick in during the first half of 2019, analysts expect the budget to be more populist compared to the earlier ones by the BJP ruled Central Government. While expectations are running high, there could be something in it for everyone; from the farmers to the corporates. While the primary focus is expected to be on the farm sector and small businesses which fell out post the implementation of GST, the salaried class could also benefit as the Government could raise the income tax ceiling from the current ₹2.5 lakhs.

Coming back to the stock markets, technically, there looks to be some more upside left in the rally after the Index broke-out from the symmetrical triangle in an uptrend in February last year with the medium- term bullish channel also indicating the Nifty to head to 11280- 11300.

With the banking and the IT sector finally participating in the rally leading to the recent advances in the broader Nifty and with some more gains left in the Index stocks, a further surge in a few of the big names in the IT, banking, infrastructure, telecom, automobile and metals space can be expected, mainly the ones which have underperformed which could easily push the Nifty to the projected targets. In addition, the Q3- earnings season is currently underway with a large number of companies expected to announce results in the next few weeks. All in all, we could be looking at the Nifty trading in the 11,100- 11,300 zone before the announcement of the budget.

However, what needs to be seen as we approach the key targets are: “Will the liquidity driven global stock market rally sustain or will we witness a correction in equities and a rally in some of the other asset classes?”


TakeStock Research delivers exclusive, well researched content in FX, Equities and Commodities for the global financial services industry. We resource content writing services that include live market commentaries, real- time updates of global economic events, fundamental and technical analysis, trading strategies, preview/ review of corporate earnings, topics related to personal finance, educational & training modules. We also offer online/ classroom training and certification programs in the financial markets. 

Our clients are spread across geographies and include financial institutions, FX brokers, advisory firms and educational institutions.