Why the markets began to party after sinking on budget day

Subscribe to enjoy similar stories. MUMBAI : The bloodbath in the markets on budget day was surprisingly cut short on Monday, as investors stepped in to bottom-fish and buy beaten-down stocks, especially those of blue chip companies that are part of benchmark indices. With much of the budget disappointment already priced in and global cues turning slightly supportive, the benchmarks recovered even as concerns over near-term growth and earnings lingered.

After sliding nearly 3% intraday on Sunday and closing nearly 2% down, the Nifty 50 climbed 1.06% on Monday to close at 25,088.40, and the Sensex rose 1.17% to 81,666.46. The benchmarks comfortably outperformed the broader market, with Nifty Midcap 100 gaining 0.96%, and Nifty Smallcap 250 rising just 0.56%. Among sectoral indices, Nifty Auto and Nifty Oil & Gas were the best performers, surging 2% each on Monday.

However, analysts said the recovery does little to change the bigger picture. The budget has reinforced policy continuity and long-term priorities, but offered limited support for near-term growth or earnings. With foreign investor flows still cautious and few immediate triggers in sight, market participants expect equities to remain range-bound, with buying limited to select stocks.

“Today’s rebound looks more like a pause than a trend reversal, with the market still searching for direction," said Kunal Parar, vice president - technical research and algo at Choice Equity Broking. He expects the Nifty 50 to correct another 200 points from the 25,000 mark before attempting a recovery, signalling a phase of range-bound and largely directionless trade. According to Nilesh Jain, head - technical and derivatives research analyst (equity research), Centrum Broking,