It was another flat day for markets. Today's Railway Budget was on very positive lines but with no major changes that would to impact equity markets. Benchmark indices ended in flat territory for the thrid day in a row.
Autos saw another week session. Stocks like M&M, Tata Motors ahead of its numbers on Friday, and Hero Honda were down 1-3%. These stocks are down 10% in the last one week.
Railway stocks saw big profit booking as they had run up quite a bit in last one week. Stocks like Titagarh Wagons, Kalindee Rail, and Texmaco are down 3-7%.
Volumes were high one day before F&O expiry, at one lakh crore. The market breadth ended up quite weak at 1: 3 in favour of declines.
So, how are markets likely to trade ahead of Budget?
Gautam Vora of ULJK Securities expects markets to trade flat until the Budget, until there is more direction. "The Nifty has been trading in a 40-50 point zone over the last few days. Most institutions are not taking direction bets right before the Budget. Most people are sitting on the sidelines and just waiting for this Budget to pass. Hence, it is going to be flat. We will start getting some direction on the market once the Budget comes out.
From a technical perspective, there is a strong support at 4,800. If it breaks that, there is support at 4,716 which is now the 200 DMA. As far as resistance levels are concerned, 4,950 is a huge resistance. Once it crosses that level, you can look at 5,050 as the next level of upside."
Seconding Vora, Deven Choksey of KR Choksey Securities feels investors are extremely cautious. "Investors are scared. Even institutional players are not finding comfort with this particular market. Even though everybody is convinced about valuations in the next twelve months or so, not a single guy is talking with confidence that they see liquidity coming back in next two-three months. Everybody is skeptical about that. So, sentiment is taking its toll. As a result, the kind of activity which should take place in the market is not happening."
Amit Khurana of Mangal Keshav Securities too feels markets are currently waiting for the Budget to be out of the way before deciding its future course. "The markets expect a clear-cut roadmap on acceleration towards the gross domestic product (GDP) growth rate, what sort of spending would they like to do on infrastructure and how would they go about it.
Second, investors are looking at the process towards fiscal consolidation and what sort of measures would the government need to take on that could impact a lot of sectors including financials and the corporate in general."