Stock market today news: Sensex, Nifty see profit booking in trade.
- Sensex and Nifty erased early gains as profit booking hit markets on Budget day.
- Major stocks like Hindalco, Coal India, SBI fell; Max Healthcare, M&M gained.
- India VIX jumped 17 percent, signaling increased market volatility.
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The benchmark equity indices Sensex and Nifty pared early gains on February 1 as investors booked profits at higher levels amid volatility on Budget day.
Ahead of the Union Budget presentation by Finance Minister Nirmala Sitharaman at 11 am — her ninth Budget — markets had advanced sharply. The Sensex climbed to an intra-day high of 82,726.65, rising 457 points or 0.55 percent, while the broader Nifty moved up to 25,440.90, gaining 120.25 points or 0.47 percent.
However, by around 12:30 pm, profit booking emerged, pulling the benchmarks off their highs. The Sensex slipped to 80,931.41, down 1,338.37 points or 1.63 percent, while the Nifty declined to 24,826.25, down 494.40 points or 1.95 percent.
Hindalco Industries, Coal India and State Bank of India were among the major laggards in the Nifty50 pack, declining up to 5 percent, while Max Healthcare Institute and Mahindra & Mahindra rose up to 3 percent. Market breadth was positive as bout 2041 shares advanced, 1566 shares declined and 150 shares unchanged.
Key reasons behind market decline
1) Profit booking: Investors locked in gains at higher levels after the indices rose up to 0.5 percent in early trade ahead of the Budget presentation.
2) Budget day volatility: The equity markets have historically witnessed sharp swings during the Budget speech. In 14 of the last 15 occasions, the Nifty 50 has seen intra-day fluctuations of 2–3 percent.
“Markets are likely to remain highly volatile, with sharp moves possible in either direction depending on key announcements around fiscal policy, capex push, sector-specific incentives, and the fiscal deficit target,” Ponmudi R, CEO of Enrich Money, an online trading and wealth-tech firm, said.
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3) India VIX rises: The India VIX, a measure of market volatility and investor uncertainty, rose over 17 percent to 15.66. A rise in the volatility index typically indicates higher nervousness among investors, often leading to cautious trading and increased short-term fluctuations in equity markets.
4) Increase in STT: BSE, Angel One shares fell up to 10% as FM Nirmala Sitharaman raised STT on futures to 0.05% from 0.02%. Nifty Capital Markets crashed 6% following the announcement.
“The increase in STT on derivatives is a negative for markets as it can reduce liquidity. Furthermore, lack of relief on STT for cash market investments and measures to attract foreign investments were the big negatives,” Ambareesh Baliga, an independent market analyst, told Reuters.
5) Selling in PSU bank shares: The PSU bank index fell over 4 percent amid sharp selling by investors, emerging as the worst-performing sectoral index. The Nifty Public Sector Bank index recorded the biggest decline among major sectoral indices.
Shares of Bank of India and Bank of Baroda led the losses, falling 7 percent and 6 percent, respectively. UCO Bank and Punjab & Sind Bank declined the least, shedding 2 percent and 2.7 percent, respectively. All the 12 constituents of the index ended in the red.
Technical outlook
Anand James, Chief Market Strategist at Geojit Investments, said the Nifty has managed to hold above key support levels.
“The 25,180 region has held ground so far, preventing a potential fall to 24,715-24,650-24,580. Expect swings and attempts to test both ends of the 25,180–25,400 band. Oscillators permit further upside, with 25,580–25,800 in sight, but weak momentum raises questions on sustainability,” he said.
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