Post-Bugdet Strategy: Where is Nifty 50 headed next? Key technical levels to watch | Stock Market News

Budget Technical Outlook: The Indian stock market faced sharp losses in early trade on Monday, February 3, with the Sensex tumbling over 700 points and the Nifty 50 dropping below 23,250, amid weak global cues.

The Sensex fell 750 points to hit an intraday low of 76,791.09. Similarly, the Nifty 50 also slid one per cent to 23,222.

The broader markets witnessed an even sharper selloff, with the BSE Midcap and Smallcap indices plunging over one per cent each, as investors reassessed their positions post the Union Budget 2025 and amid a deteriorating global economic landscape.

Key Takeaways from Union Budget 2025

One of the most significant highlights of the Union Budget 2025 was the increase in the income tax exemption limit under the new tax regime to ₹12 lakh, a move aimed at boosting consumption, savings, and investment. Market expectations were set at a rise to ₹10 lakh, making the ₹12 lakh exemption a positive surprise for middle-class taxpayers.

However, concerns emerged over the government’s reduced focus on infrastructure capital expenditure (capex) for FY25. The initial target of ₹11 lakh crore was lowered to ₹10.18 lakh crore, primarily due to delays in spending. Despite this, analysts maintained a positive stance on the overall impact of the Budget on consumption-driven sectors.

Global Market Headwinds Adding Pressure

Beyond domestic budgetary concerns, global factors also weighed on sentiment. Notably, former US President Donald Trump’s announcement of new tariffs on Canada, Mexico, and China rekindled trade war worries. Additionally, the strengthening of the US dollar and continued foreign investor outflows dampened investor confidence.

Looking ahead, all eyes are now on the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) meeting this week, with experts anticipating a 25 basis point rate cut to support economic growth and consumer demand.

Expert Market Outlook and Technical Views

Ajit Mishra – SVP, Research, Religare Broking Ltd.

Markets experienced high volatility during the special trading session for the Union Budget, ultimately closing flat after the recent rally. The Nifty 50 initially gained momentum but failed to surpass the key resistance at the 200-day exponential moving average (DEMA), closing at 23,482.15.

From a sectoral standpoint, FMCG, auto, and real estate stocks witnessed buying interest, benefiting from the tax relief measures announced in the Budget. However, defence, energy, and infrastructure stocks showed signs of weakness.

In the near term, the impact of the Budget is expected to remain in focus, particularly in consumption-driven sectors. The Nifty 50 could consolidate around its current levels as traders watch for a breakout above the 200 DEMA at 22,620. With the earnings season set to take centre stage, stock selection will be crucial for traders.

Rupak De, Senior Technical Analyst, LKP Securities

The Nifty 50 witnessed sharp swings during the Budget session, forming a small-bodied candle on the daily chart, signalling indecision among traders.

The index has support at 23,280, and as long as it remains above this level, the overall trend is likely to stay positive. On the upside, the short-term target for Nifty remains at 23,700–24,000. However, a break below 23,280 could trigger further downside pressure, leading to panic selling in the market.

Geojit Financial Services

While the post-budget close was relatively stable, the volatility seen throughout the day led to a drop in stocks trading above their 10-day Simple Moving Average (SMA). Given this backdrop, the brokerage believes that dips toward 23,400 could be buying opportunities, with the 23,700–23,840 trajectory resuming thereafter. However, a break below 23,190 could invalidate the bullish outlook and lead to further downside.

In summary, the Indian stock market remains under pressure, weighed down by global uncertainties, Budget takeaways, and cautious investor sentiment. While the tax exemption hike is seen as a positive, concerns over lower infrastructure spending and external market risks continue to impact near-term sentiment.

The RBI policy meeting will be a key catalyst, with expectations of a rate cut that could provide relief to consumers and support market sentiment. Meanwhile, traders should focus on sectoral trends and technical levels, with the Nifty 50 likely to consolidate before making its next decisive move.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.