Stock Market Stares at Extreme Volatility ahead of Budget
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US Fed Hawkish Notes May Pause Rebound Rally in Stock Market
By S Jha
New Delhi, January 30: The stock market may turn volatile in the run up to unveiling of the Union Budget on Saturday. The hawkish commentary of the US Federal Reserve may also alarm the bulls in the street.
The US bourses ended lower in the Wednesday session. The two days long rebound rally in the Indian stock markets may take a pause on Thursday per market participants.
The Gift Nifty was trading lower in the morning session. The US federal Reserve left the rates unchanged.
Jerome Powell, the chairman of the US Federal Reserve, in his comments said that he was unsure of the policy directions under US President Donald Trump. Powell also made references to anti-immigration measures of Trump.
The US markets ended lower after two days of rebound after tech selloff on fear of the Chinese AI startup DeepSeek turning a major disrupter. Analysts claimed that $1 trillion of market valuations was wiped out in the selloff.
Nifty also held its support level at 22800 to make a comeback above the 23000 level. But a retest of the support level at 22800 is not ruled per market participants.
The dollar index strengthened following the US Fed commentary. This may also be a negative cue for the Indian equity market.
The US Fed stance on unchanged rates also dismayed the market hopefuls of immediate rate cuts. The Reserve Bank of India will also be meeting for the monthly policy meeting next week.
On the liquidity boost interventions, the market is expecting that the RBI will cut rates to spur growth. The rebound rally in the Indian stock market also took place due to the hope that the RBI will cut rates.
Stock Market Today: Nifty Can Crack 1k Points if Support Sinks
Also, the foreign institutional investors bought into the Indian equities in the last two days. The indicators on the FIIs turned bullish.
But the unveiling of the Union Budget, the MPC meeting of the RBI, and the US Fed holding rates are three big events for the stock markets.
Besides, the US tech stocks are still not out of the woods. The looming China-US trade war may spill over to the tech showdown between the two largest economies of the world, warned market participants.
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