Nifty Rebounds Sharply After Budget; Banking Stocks Gallop

Nifty, +4.7%; Sensex, +5%; Nifty Midcap, +3.3%; Nifty Smallcap, +2%; Model Portfolio, +2.1%

Market Pulse Uptrend Under Pressure

Distribution Day Count: Six

Nifty gapped higher this morning and remained strong throughout the session. Nifty was around 1.5% higher during the budget hours. As soon as FM concluded the budget, a sharp rally was witnessed, led by Banking and Financial Services stocks. The focus remained on growth with the government going for a higher fiscal deficit. The other part that the market liked was that no major negative like hike in tax came in the budget. Advance-decline ratio was skewed toward advancers. Out of 2,252 stocks, 1,356 advanced and 567 declined. On the sectoral front, Nifty Bank, Financial Services, and Realty closed 6–8% higher. Nifty Auto and Metal closed 4–5% higher. On the flip side, Nifty Pharma (-0.5%) closed in the red.

Last week, market status was changed to an Uptrend Under Pressure as Nifty breached its 21-DMA and distribution day count was elevated. The status will be back to a Confirmed Uptrend if Nifty retakes 14,754 (high during the recent rally). Today, with the Nifty rebounding sharply from its 50-DMA, we will continue to look for leadership-quality growth names to form entry points. At the same time, we will continue to monitor the market and look for signs of weakness.