Volatility grips Nifty, Sensex following Budget 2024: What experts have to say

In the aftermath of Finance Minister Nirmala Sitharaman's announcement of the Interim Budget 2024, both the Nifty 50 and the Sensex experienced significant volatility.

Analysts attributed the market's volatility to a mix of factors, including the Budget aligning with expectations and avoiding populist measures ahead of the General Elections. They highlighted the government's display of fiscal prudence as a positive for both the economy and the stock market. Given that it was an Interim Budget, the market had relatively moderate expectations.

V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, commended the interim Budget's fiscal rectitude, emphasizing the government's prioritization of fiscal consolidation over populism on the eve of general elections. He expressed optimism about the fiscal deficit numbers for FY24 and FY25, stating that they exceeded expectations.

Sonam Srivastava, smallcase manager, and founder of Wright Research noted mixed reactions in the market. Positive movements in the FMCG sector were attributed to measures expected to boost consumer spending power, while railway stocks experienced a decline, possibly due to concerns over the execution and immediate impact of infrastructure projects.

Market sentiment was further influenced by weak global cues following the US Federal Reserve's decision to keep benchmark interest rates unchanged at 5.25% - 5.50%, marking the fourth consecutive meeting without rate adjustments.

Ashwin Ramani, derivatives analyst at SAMCO Securities, highlighted key levels for Nifty at 21,800 on the upside and 21,500 on the downside. He suggested potential cooling off of volatility in the coming days and recommended strategies like credit spread or short strangle/straddle to capitalize on potential volatility reduction.

Mehta Equities analysts identified the immediate resistance for Nifty at 21,840 and the support at 21,650, with a move below the latter potentially leading to a down-move.

In summary, the market's muted response to the Budget reflected cautious optimism, with investors seeking clarity on the implementation of budget proposals. The overall trend was considered positive, but uncertainties in global markets and a focus on upcoming earnings reports played a role in the subdued market reaction.