Bulls remained in control of D-Street for the second consecutive day in a row on February 2 pushing the S&P BSE Sensex above 50,000 while the Nifty50 also reclaimed 14700. Both indices witnessed profit-taking towards the close of the trade.
The S&P BSE Sensex rose 1197 points to 49,797 while the Nifty50 closed with gains of 366 points to 14,647. The NiftyBank hit a fresh record high of 34,652.
Sectorally, the action was seen in auto, capital goods, realty, banks, public sector, and telecom space. On the broader markets front – the S&P BSE Mid-cap index rose 2.2 percent while the S&P BSE Small-cap index rose by 1.59 percent.
Experts are of the view that the momentum will continue as foreign institutional investors have also joined the party on D-Street. FIIs who were net sellers in the cash segment of the Indian equity markets for more than Rs 10000 cr in 5 sessions in the run-up to the Budget poured nearly Rs 1500 cr on Budget Day.
“Start of a new rally is noticed in sectors like banking, infra and auto, supported by a renewed traction provided by a growth-oriented budget,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.
“After consecutive selling by FPIs last week, the market witnessed a reversal in trend becoming net buyers post the budget. Positive global sentiments ahead a new US COVID support bill also lifted the market,” he said.
Here is what experts say investors should do on February 3:
Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services Limited
We witnessed marginal profit booking from higher levels and the index concluded the session at a tad below the 14650 zone, with gains of 2.57% over its previous close. It formed a Bullish candle on the second consecutive session.
The buying interest is there across the street as all the sectoral indices are trading in green. Now, Nifty has to continue to hold above 14500 zones to continue its bullish momentum towards 14850 and then 15000 zones while immediate support can be seen around 14500 and then 14300 zone.
Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities
The Bank Nifty closed above 34000 levels, which is 4000 points higher as compared to the closing levels for the expiry of January 2021.
Based on the daily chart, the Nifty/Sensex opened with a large price gap compared to the previous day’s high and remained at a high level despite facing several rounds of profit booking throughout the day.
The next level to watch out for would be 14750/50185 followed by 14900/50900 levels. There should be a strategy to buy between 14300/49000 and 14200/48700 levels.
Traders & investors need to keep the last stop loss at 14100/48400. We need to be defensive as the market approaches previous highs and the focus should be on pharmaceuticals and FMCG stocks.
Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas
The Nifty witnessed the continuation of the positive momentum on February 2. It opened with a significant gap on the upside & went on to test the all-time high of 14753. However, it remained marginally short of the all time high.
Once the high gets taken out, the index can head towards 15000 in the short term. On the downside, the gap area of 14469 – 14336 will act as a crucial support zone. The 20 DMA is also near the gap area, which will offer additional support
Ajit Mishra, VP – Research, Religare Broking Ltd.
As the budget is behind us, all eyes will be on RBI monetary policy outcome scheduled on Friday i.e. February 5. Meanwhile, as more corporates announce their results, stock-specific volatility would remain high.
The markets may see a breather after the recent surge but the bias would remain on the positive side. Participants should maintain their focus on identifying the right opportunities across sectors.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.