The benchmark indices, Sensex and Nifty, ended slightly lower in a volatile trading session on Tuesday as the government announced a proposal to increase the securities transaction tax on futures and options in the 2024-25 budget.
Despite recovering most of its intra-day losses, which exceeded 1,200 points, the 30-share BSE Sensex closed down by 73.04 points or 0.09%, at 80,429.04. The index fluctuated throughout the day as Finance Minister Nirmala Sitharaman revealed the budget proposals for 2024-25.
Commenting on the market movements, Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates Ltd noted:
"Domestic benchmark indices began higher on Friday, buoyed by positive results from IT giant Infosys. As a result, the Nifty registered a new record high of 24,854.80, but subsequently experienced heavy profit booking and concluded the day negatively at 24,531 levels. The broader market indices, Nifty Midcap 100 and Nifty Small Cap 100, underperformed and closed down by more than 2%. Technically, the index on a daily scale has formed a bearish engulfing candle and on a weekly scale, it has formed a shooting star candle, indicating weakness. Thus, as long as the index remains below 24,855, a sell-on-rise strategy needs to be adopted in Nifty.
Bank Nifty index opened gap down, remained under pressure throughout the day, and finally settled the day on a negative note at 52,266 levels. Technically, on the daily scale, the index has formed an inside bar candlestick pattern. However, the index managed to defend the 21-DEMA support of 52,030 levels. Thus, Bank Nifty will find strong support near 52,000 levels. On the upside, 52,800 and 53,000 will serve as strong resistance levels."
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Overall, the market's reaction to the budget announcements was mixed, with significant intra-day volatility reflecting investor concerns and profit booking. As the market digests the implications of the new budget proposals, key technical levels will play a crucial role in determining future trends.
