Indian stocks closed Monday on a mixed note after beginning the day down. This was mostly because Reliance Industries and Wipro released quarterly results that were below market expectations. The union budget was due the next day, which added to the market’s already high volatility.
The market will be trading carefully leading up to the Budget. Given the increased opportunity for profit booking, the pressure on the whole market is probably going to persist.
It is critical to realize that the market anticipates a good budget that is fiscally responsible, growth-oriented, and offers middle-class taxpayers income tax breaks. The market also anticipates the long-term capital gains tax to remain unchanged. The market may respond badly if there is any disappointment in these areas. Conversely, if the Budget meets projections, strong retail purchasing might drive the market to all-time highs.