The free fall of the Indian stock market continued on thetrading day of Friday yesterday. Experts are opining that profit booking aheadof the Union Budget 2021 which is tomorrow i.e. February 1, 2021 is the reasonfor the non-stop decline.
The benchmarks of Indian stock market – the sensitive index(Sensex) and the Nifty 50 did break into lifetime highs recently, and thesewere of important psychological levels. Sensex breached 50,000 and Nifty 50breached 15,000.
Joe Biden’s ascension as the new president of the UnitedStates, and his proposed financial stimulus helped the markets rise. Furtherpush was given by reduction in cases of COVID-19.
However, the markets had difficulty staying there and fell.Selling by foreign institutional investors, which increased as the date for theBudget approached quickened the fall of the Indian stock market. It isworthwhile to note that more Rs 12,000 crore have been taken out of the Indianstock market in the cash segment (i.e. delivery of stocks).
Also read: Analysis of the Economic Survey 2021
Things to watch out include in addition to the Budget, thequarterly earnings of more than 400 companies will be released in the firstfive days of February. The earning releases so far have been stable.
Technical analysis-wise, experts see an important support at13,400 levels and a closing above 14,000 would be required to give bulls confidencethat the current downfall is only a pullback.