FMCG and Realty stocks emerged as top performers, with their respective indices rising by over 3% each, whereas IT, PSU Banks, and Financial Services sectors faced declines. Overall, the market’s reaction was relatively muted, baring a heightened action in the Consumption sector as the Finance Minister announced some key initiative that triggered some pent-up reaction in this sector.
Now, we need to step into the week as traders and investors shall decode the long-term impact of the budget.
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Indian stock markets: Way forward
We had shared that the trends remained positive but we needed to be cautiously bullish though the trends overall were indicating the bullish bias. We had mentioned that “.. with an event unfolding tomorrow we have tried to retain the bullish sentiment as the inability of a rebound had stressed everyone..”. One of the key reasons were the expectations from the Budget and with a populist Budget coming through the response to the budget could set the tone for the days ahead.
On the charts too we had shared a former resistance zone around 23300 – 23400 mark where some short build up was emerging as per the Oepn Interest data and the surge beyond those zones saw the shift to 23500 ahead of the event.
Now, with the mood getting set for a recovery one should look for some sustained effort in the coming days to witness some steady bullish action. While the fineprint of the budget will get ironed out the event to look forward to in the Feb 5 Bihar elections. As market tries to find its feet the way ahead remains fraught with uncertainty as the global market continues to be volatile. The Max Pain Point continues to remain at 23500 as market tries to settle down at this level planning the way ahead.
Sectors to watch out for in 2025
Automotive
The Union Budget 2025 introduces significant reforms to boost India’s auto sector. The budget emphasizes support for domestic manufacturing by extending customs duty exemptions to 35 capital goods essential for EV battery production and promoting the local manufacture of motors, controllers, and other critical components.
The budget also allocated significant funds for developing charging infrastructure and implementing technology-led systems. Incentives are introduced for sustainable mobility, including support for sustainable logistics, alternative fuels like Auto LPG, integration of EVs within commercial fleets, and the promotion of renewable energy infrastructure.
The budget placed a strong emphasis on research and innovation, particularly in emerging technologies such as solid-state batteries and hydrogen fuel cells. Lastly, transformative measures for agriculture and the rural economy are set to increase demand for basic two-wheelers and entry-level cars in rural areas, stimulating rural and middle-class consumption. Overall, the Union Budget 2025 aims to accelerate the transition towards cleaner, more sustainable mobility while supporting domestic manufacturing, innovation, and economic growth in the auto sector.
I would like to select one stock from this sector that has been able to withstand the test of time and has been catering to both the rural as well as the urban – Mahindra and Mahindra.
The above charts clearly indicate a strong bullish upside seen in the last 7 days. The rising RSI is clearly indicating that the trends are desiring to move higher and the encouraging numbers that are being reported from the auto sales clearly indicate that the upward trajectory could continue.
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Relative Strength Index (RSI) is also getting ready for some upside. With bullish scenario developing, one can look at targets of 3430 within the next few days as the tailwind is definitely favouring some higher grounds.
Healthcare
The initiatives in Union Budget 2025 focus on transformation and aim to significantly elevate India’s healthcare sector. The substantial allocation of ₹98,311 crore—an impressive increase from previous year—underscores government’s robust commitment to enhancing healthcare infrastructure and services nationwide. By exempting 36 critical life-saving medicines, including treatments for cancer and rare diseases, from customs duty, the government takes a decisive step toward making essential medications more accessible and affordable for the populace.
Aiming to become a global hub for medical excellence, India is set to boost medical tourism through private sector collaboration, offering promising growth opportunities. This directive shall focus on boosting economic growth through international patient inflow. Also, the emphasis on expanding broadband connectivity to all government secondary schools and primary healthcare centres facilitates the advancement of digital healthcare services and telemedicine, bridging the urban-rural divide in healthcare access.
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Collectively, these measures indicate a comprehensive strategy by the government to strengthen the healthcare sector, improve accessibility and affordability of care, and foster innovation and capacity building. From this space I find that the charts of Bajaj Healthcare have been able to buck the trend and remain resolute.
From the above charts we can clearly observe that the trends have managed to survive the scare since the last few weeks indicating that the trends are resuming their upward traction once again. The steady support from Ichimoku bands signals potential upward momentum. A move toward the 830 target zone could be likely in the coming weeks.
Fast moving consumer goods (FMCG)
The major highlight of the Union Budget 2025 was that it brought several favourable changes for the FMCG sector, positioning it for robust growth. A major surprise, that triggered some positive sentiment, was initiatives to include significant tax relief for individuals earning up to ₹12 lakhs.
This major move is expected to enhance disposable incomes and drive both rural and urban consumption. Companies like Godrej Consumer Products, Varun Beverages, and ITC are well-positioned to benefit from this increased spending power.
The government’s commitment to infrastructure investment is anticipated to generate new job opportunities, thereby increasing disposable incomes, and promoting further consumption. Overall, these measures signal a positive outlook for the FMCG sector, with companies poised to capitalise on heightened consumer demand.
FMCG space has been showing some promise since the last few days and the budget has come as a shot in the arm that could now trigger some sharp upmoves in the coming days. I have been tracking the moves in Jubilant Food and this stock after the recent drop into the Kumo cloud due to profit booking is once again showing a steady revival.
The recent long body candles that are being displayed are clearly showing a bullish intent. Hence, considering the recent positive newsflow one can look at the prices scaling towards 850 within the next few weeks.
Raja Venkatraman is co-founder, NeoTrader.
