Stock Market: Budget Day brings mother of all swings

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By S Jha

New Delhi, February 1: It took the stock market a fair amount of time after Finance Minister Nirmala Sithraman had concluded her Budget speech that there were no reasons for the indices to fly. By the time Sitharaman rolled out her tax proposals, indices had begun flying, but the bolt soon struck as the market nosedived. In the end, the institutional 3PM action brought back the indices to sanity.

Before the Nifty and Bank Nifty recovered their senses, bloodbath had already bled the Adani Group of stocks. The likes of Adani Enterprises, Adani Port, Ambuja Cement and others were beaten black and blue by the shorters. The flagship Adani Enterprises had been knocked away by over 28 per cent. The Adani Group showed the ‘pump and dump’ show. Late in the evening, Adani Enterprises withdrew its Rs 20,000 crore FPO with aims to “save the interests of the investors”.

The wild show on the bourses came ahead of the US Fed rate hike decision. The street is expecting 0.25 per cent hike. Dow Jones was trading with over one per cent cut in the afternoon trade in the US market ahead of the announcement of the US Fed decision. The US equity markets’ behavior will influence the Indian stock market on Thursday, which is also a weekly expiry for the option contracts.

The missing theme in the Budget for housing, auto, consumption rubbed on the street, as bullish stocks were also hammered in the wild bear dance on the street. ICICI Bank had led the charge for the Bank Nifty since the morning bell, and showed signs of finally returning back to the bullish momentum, but the scrip was pushed down later.

The Nirmala Sitharaman missile destroyed the insurance companies, as they ended the day with broken noses. The likes of heavyweights such as HDFC Life, SBI Life, LIC and others ended the day with deep cuts. This was followed by the Budget announcement that proceeds above Rs 7 lakh from insurance policies would be taxed.

Traders are betting on another volatile session on Thursday, which will have added swings on account of the expiry actions. While the Budget has shown commitment to scale up public expenditure, the lack of space to boost consumption by leaving money in the hands of the people was a big dampener for the Dalal Street.

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