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Below the Quote on Daily Market Analysis by Mr. Ajit Mishra – SVP, Research, Religare Broking Ltd

Union Budget day turned into a roller coaster for investors, with the Nifty Index fluctuating dramatically before ending the session flat. The initial mood was subdued, but the announcement of increased STT on F&O and higher STCG and LTCG tax rates sparked a sharp reaction midway through the day. However, buoyant performance from select heavyweights helped recover most of the losses in the latter half.

Sector-wise, FMCG and IT displayed notable resilience, while realty, metals, and banking faced pressure. The broader indices also underperformed, declining between 0.6% and 0.9%.

Given the volatility, we advise maintaining a cautious stance. It’s crucial for Nifty to sustain above the 24,200 level to keep a positive outlook; otherwise, profit-taking may intensify. Traders should adopt a hedged approach and favor defensive sectors such as FMCG, pharma, and IT for long trades. Conversely, avoid adding to positions in overbought themes like defense, railways, and select PSUs, and use any recovery to reduce exposure in loss-making trades.

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