The Indian stock market is poised for a day of heightened volatility as the Union Budget 2026-2027 is set to be unveiled later today. Benchmark indices Sensex and Nifty 50 are expected to experience significant fluctuations, with investors closely monitoring the announcements from Finance Minister Nirmala Sitharaman in Parliament. Market sentiment suggests anticipation of policy continuity rather than any major reforms, which could influence trading patterns throughout the session.
Special Trading Session and Previous Day's Performance
In a departure from the usual schedule, both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) will remain open for a special trading session on Sunday, February 1, specifically to accommodate the Budget presentation. This move underscores the importance of the event for market participants and the broader economy.
On Friday, the Indian stock market concluded its trading day on a negative note, breaking a three-session winning streak. The decline was primarily attributed to profit booking by investors. The Sensex dropped by 296.59 points, or 0.36%, closing at 82,269.78. Similarly, the Nifty 50 fell by 98.25 points, or 0.39%, settling at 25,320.65. This pullback highlights the cautious approach adopted by traders ahead of the Budget announcement.
Expert Insights and Investment Strategy
Ajit Mishra, Senior Vice President of Research at Religare Broking Ltd., provided valuable guidance for investors navigating this volatile period. He emphasized the importance of adopting a buy-on-dips strategy, focusing on quality large-cap stocks. Sectors aligned with manufacturing, infrastructure, and exports are particularly recommended for investment.
Mishra advised traders to remain agile around key events, proactively manage risks, and avoid aggressive leverage during event-driven market movements. He suggested selective exposure to banking, defence, and energy sectors, while urging caution in industries facing persistent global challenges. This strategic approach aims to balance potential gains with risk mitigation in an uncertain market environment.
Global Market Cues Influencing Indian Stocks
Wall Street Performance
US stock markets ended lower on Friday, influenced by investor reactions to political developments. The Dow Jones Industrial Average fell by 179.09 points (0.36%) to 48,892.47, while the S&P 500 declined by 29.98 points (0.43%) to 6,939.03. The Nasdaq Composite dropped 223.30 points (0.94%) to 23,461.82. Notable stock movements included gains for Apple (0.43%) and Tesla (3.3%), while Meta fell by 3% and AMD declined by 6.13%.
European Markets and Other Factors
European markets showed resilience, closing higher on Friday as investors focused on corporate earnings. The pan-European Stoxx 600 rose by 0.5%, with the FTSE 100 gaining 0.51% and the DAX rallying 0.94%. However, other global factors added to the complexity, including a sharp decline in gold and silver prices, a strengthening US dollar, and falling crude oil prices.
Key Global Developments
Several significant events are shaping global market sentiment:
- US Federal Reserve Chair Nomination: President Donald Trump announced the nomination of Kevin Warsh as the next Federal Reserve Chairman, a move perceived as hawkish by investors.
- US Government Shutdown: A brief government shutdown occurred over the weekend due to funding delays, adding to economic uncertainties.
- Cryptocurrency and Commodity Trends: Bitcoin prices tumbled below $80,000, while Brent crude oil fell to $69.32 per barrel and WTI crude declined to $65.21.
These global cues, combined with domestic Budget expectations, are likely to keep the Indian stock market on edge. Investors are advised to stay informed and exercise prudence as they navigate the day's trading activities. The outcome of the Budget presentation will be crucial in determining market direction in the coming sessions.
