The Indian stock market opened slightly lower on Tuesday after a significant increase in the previous session. The benchmark Sensex and Nifty were down by approximately 0.1 per cent compared to their previous day's closing at the start of trading today.
The slight decline in the main stock market indicators may be due to a small amount of profit-taking.
Domestic investors are preparing for a packed week as they await Finance Minister Nirmala Sitharaman's budget proposals and other macro-economic guidance, scheduled for Thursday. The interim union budget will be closely monitored when presented by the Union Finance Minister on Thursday.
The interim budget usually addresses the financial requirements during the period between Lok Sabha polls and the formation of a new government.
Additionally, investors will be closely watching the results of the first policy meeting of 2024 for the US Federal Reserve, which is set to take place on Wednesday.
Foreign portfolio investors have shifted gears from buying to selling Indian stocks, becoming net sellers in the Indian equity market in January 2024. This comes after a period of heavy buying in November and December.
The information provided by the National Securities Depository Limited (NSDL) indicates that Foreign Portfolio Investors (FPIs) have sold Indian stocks amounting to Rs 19,664 crore in January. In contrast, in December, they were keen on investing in the Indian stock markets, accumulating a total of Rs 66,135 crore.
"In the near-term, expectations regarding the budget will influence the market. Market doesn't expect any major changes in taxation relating to the capital market. Therefore, any such proposal will have an impact on the market," said VK Vijayakumar the chief investment strategist at Geojit Financial Services.
"Large caps like RIL, Bharti Airtel, L&T and ICICI have strength to support the market," Vijayakumar added.
Meanwhile, according to Ajit Mishra, SVP - Technical Research, Religare Broking, "The stability in banking combined with buoyancy on the global front is aiding recovery however the upside seems capped citing multiple hurdles."
"We thus suggest focusing on sectors/themes that are attracting consistent buying. Needless to say, the volatility is here to stay so limit aggressive longs and prefer hedged bets," Mishra added.
