Budget 2025: Rajesh Bhosale of Angel One reveals key Nifty 50 levels, sectors to watch out for

Budget 2025 trading strategy: The Finance Minister of India, Nirmala Sitharaman, will unveil the Union Budget for FY25-26 on February 1, 2025. In recent years, the impact of the Union Budget on the equity markets has significantly decreased, as many reforms are now being introduced beyond the Budget's framework. Market experts suggest that the first half of FY25 encountered challenges due to an overall reduction in government spending, stricter credit conditions regarding unsecured loans, a drop in consumption—especially in urban regions, extended monsoon seasons, and inflationary pressures.

These factors have combined to slow down corporate earnings in the first half of FY25. Given this scenario, investors view the FY26 budget as a crucial factor for stimulating growth in the Indian economy and the related Indian market.

According to reports, the Nifty 50 index has experienced its fourth consecutive monthly drop, a situation that hasn’t occurred in 23 years. The last instance of the Nifty 50 declining for four consecutive months was in 2001. Since then, the Nifty 50 has recorded three-month declines 13 times. In approximately 70% of these instances, it rebounded within the following 2-3 months, achieving an average increase of 3-5%.

Rajesh Bhosale, Equity Technical and Derivative Analyst at Angel One, discusses trading strategies, crucial market levels, and the sectors to be on the lookout for toward the weekend.

Union Budget 2025: Nifty 50 key levels to watch out

Rajesh Bhosale explained that the beginning of the eventful week was quite dreadful, as the benchmark (Nifty 50) slipped convincingly below the 23,000 mark to challenge the supporting trendline of the ‘Falling wedge’, making it worse from a technical point of view. Additionally, the spurt in the fear index India VIX added fuel to the fire for the bears, which was evident from the development on the Advance-Decline front in the broader space. We have been maintaining our bearish stance since the last 2 - 3 months and have been repeatedly advocating against catching the falling knife.

Now, since we are about to enter a crucial and major support zone of 22,800 - 22,400, we would change our stance from bearish to cautious now. From hereon, it would be very difficult to anticipate what the Union Budget has to offer and other global developments, but unless there is any major disappointment from the budget or any other global aberration, markets are likely to see some respite in the mentioned support zone any time soon.

This certainly does not mean one should start buying throttle; but yes, accumulation in a staggered manner in the coming days is advisable with no leveraged positions.

On the upside, the bearish gap of 23,000-23,050 is likely to resist any pullbacks ahead of the event, while the formidable obstacle is present around 23,350, coinciding with the 20 DEMA.

Union Budget 2025: Sectors to watch out

The PSU Bank, Railways, Shipping, and Defense sectors, which were key themes in the first half of last year, have undergone a healthy correction over the past few months and are now trading at attractive levels. Any positive developments in these sectors could trigger a strong upward movement.

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.