The Indian stock market is poised for a week potentially shaped by five key factors, ranging from domestic fiscal policy to global economic decisions and corporate performance. Investors are closely watching the unveiling of the Union Budget 2026, scheduled for February 1, along with the U.S. Federal Reserve's meeting, and the ongoing release of Q3 results.
Union Budget 2026: Balancing Growth and Uncertainty
The Union Budget 2026, presented by Finance Minister Nirmala Sitharaman, is expected to significantly influence market sentiment. Historically, the pre-Budget period is marked by caution as investors brace for potential policy changes. The budget is expected to focus on capital expenditure, promoting manufacturing-led growth, and maintaining macroeconomic stability amidst global uncertainties. Key expectations include measures to boost manufacturing competitiveness, improve human capital, modernize tax and trade regimes, and encourage investment in emerging technologies. Dr. Partha Chatterjee from Shiv Nadar University Delhi-NCR, suggests the budget should aim to build macro-resilience against currency volatility, shifting capital flows, tariff risks, and inflation. India Inc. anticipates clarity on taxes, reforms, and policy priorities to unlock economic growth. The stock exchanges (BSE and NSE) will remain open on Sunday, February 1, for trading during the budget presentation.
US Fed Meeting: Monitoring Interest Rate Decisions
The U.S. Federal Reserve's meeting is another crucial event. While a rate change is not expected at the January meeting, insights into the Fed's future monetary policy will be critical. Economists at Nomura anticipate the Federal Open Market Committee (FOMC) to keep rates unchanged, with a possible dissent from Governor Miran favoring a rate cut. Federal Reserve Governor Lisa Cook was present at the U.S. Supreme Court on January 21, 2026. The Fed's decisions on interest rates have global implications, influencing capital flows and market sentiment in India.
Q3 Results: Decoding Corporate Performance
The ongoing Q3 earnings season is providing insights into the financial health of India's companies. Several major companies are releasing their December quarter earnings, impacting stock-specific strategies. Investors are closely monitoring results from sectors like banking, pharma, energy, and infrastructure to gauge demand, margins, and management outlook. Some of the Q3 results declared include: JSW Steel, Cipla, Adani Green Energy.
Global Cues: Navigating International Market Dynamics
Global market trends and cues play a significant role in shaping the Indian stock market. Investors are closely watching global indices. Factors such as international trade negotiations, geopolitical tensions, and the policies of global leaders, such as U.S. President Donald Trump, can impact investor sentiment and market volatility.
FII/DII Activity: Continuous selling by Foreign Institutional Investors (FIIs) has been a concern, with net sales of ₹36,591 crore in January 2026. This outflow has put pressure on the domestic market and the rupee. Domestic Institutional Investors (DIIs) have been trying to counter this selling pressure through buying activity.
Technical Outlook: The technical structure of Nifty reflects a significant breakdown and caution is advised. Nifty ended the week with a net loss of 645.70 points or -2.51%. The immediate resistance levels are placed at 25,320 and 25,650, with supports at 25,000 and 24,800.
In conclusion, the Indian stock market faces a week loaded with potential triggers. The Union Budget 2026, US Federal Reserve meeting, Q3 results, and global cues will be closely monitored by investors.
