Indian stock markets are set for an action-packed week, with several major triggers lined up. Corporate quarterly results, the US Federal Reserve’s interest rate decision and the Union Budget for 2026–27 are expected to guide investor mood. Markets will remain closed on Monday due to the Republic Day holiday.
Budget to take centre stage
Finance Minister Nirmala Sitharaman will present the Union Budget on February 1. Both the NSE and BSE will hold special live trading sessions on Sunday to coincide with the Budget announcement. As the week progresses, market focus is expected to shift sharply towards Budget proposals aimed at boosting growth and investor confidence.
Key earnings
The earnings season is picking up pace, with results due from major companies such as Axis Bank, L&T, Maruti Suzuki, ITC, NTPC and Bajaj Auto. Analysts believe these numbers will play a crucial role in shaping near-term market direction.
Global cues
Global factors will continue to weigh on markets. Investors are closely watching US economic data, the Federal Reserve’s policy decision and developments in global trade. Movements in crude oil prices and trends in overseas markets will also be tracked.
Rupee weakness & FPI selling
The rupee recently slipped to a record low of 92 against the US dollar. Foreign portfolio investors have stepped up selling amid the weak currency, uncertainty over a US–India trade deal and muted corporate earnings so far this quarter. These factors have kept market sentiment under pressure.
Short trading week
With trading resuming on Tuesday, some experts see a possible positive trigger from developments related to the India–EU free trade talks expected on January 27. However, geopolitical concerns, including tensions involving Iran and Greenland, continue to pose risks.
Pre-Budget positioning
As markets enter the pre-Budget phase along with the monthly derivatives expiry, a mild technical bounce is possible. High short positions by foreign investors and oversold indicators could lead to short-covering rallies.
What investors expect
Market participants are largely expecting fiscal discipline, with the fiscal deficit projected around 4.2–4.3 per cent of GDP. Continued focus on capital spending, especially in infrastructure, defence and railways, is also anticipated. Investors are hopeful for modest tax tweaks, targeted sector support, measures for MSMEs and exporters, and steps to deepen capital markets.
Markets end on weak note
Last week, the BSE Sensex fell over 2,000 points, while the Nifty dropped more than 645 points. Analysts attributed the decline to weak global signals, continued foreign fund outflows, a falling rupee and lacklustre earnings.
Limited Budget impact
Experts say that unless there are major tax surprises, the equity market may see only a limited reaction to this year’s Budget. Beyond numbers, attention will be on steps to support MSMEs, encourage job creation, rationalise duties and maintain the government’s push on capital expenditure amid a challenging global environment.
