On January 29, 2026, the Indian stock market experienced a volatile session, with both the Sensex and Nifty initially declining before staging a recovery in the afternoon. Several factors influenced this intraday movement, including global cues, domestic developments, and investor reactions to the Economic Survey 2026.

Global and Domestic Factors Influencing the Market:

• Global Cues: Asian markets exhibited a mixed performance, with Japan's Nikkei futures and Australia's S&P/ASX 200 showing declines, while Hong Kong's Hang Seng experienced a slight dip. These mixed signals from overseas markets contributed to a cautious trading environment in India. The US Federal Reserve's decision to maintain interest rates at 3.5%–3.75% also played a role, signaling continued vigilance over inflation and employment.

• Currency Pressure: The Indian rupee weakened, hovering near historic lows at ₹92 per US dollar. This raised concerns about import costs and potentially dampened foreign investor sentiment. A weaker rupee particularly impacted the IT and pharma sectors, despite these sectors typically benefiting from exports.

• Union Budget Anticipation: The market is awaiting the Union Budget scheduled for presentation on Sunday. Investors are closely watching for announcements that could influence market direction, with expectations for a 4.2% fiscal deficit target, infrastructure capex, and AI-focused incentives.

• Economic Survey 2026: The Economic Survey 2026 projected India's GDP growth at 6.8% to 7.2% in the 2026-27 financial year. The survey also indicated that India is on track to meet the fiscal deficit target of 4.4% in the financial year 2026.

• FII Activity: Foreign institutional investors (FIIs) have been exhibiting a cautious stance, with reports of selective selling in the Indian market as they await clarity from the upcoming Union Budget and Economic Survey. Continued selling by FIIs can put downward pressure on the market.

Sectoral Performance:

The Nifty Metal index outperformed the broader market, rising over 2%. Conversely, several other sectoral indices, including Nifty IT, Auto, FMCG, Consumer Durables, and Media, experienced declines of over 1% each. Banking and oil & gas stocks showed relative resilience.

Expert Opinions:

Dr. V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that markets are reacting to global uncertainties and domestic policy expectations. He suggested that the recent rally in the Nifty was primarily due to short covering in anticipation of the Budget.

Other Contributing Factors:

• Geopolitical Tensions: Rising geopolitical tensions, particularly between the US and Iran, rattled investors. Concerns over potential disruptions to global stability, increased inflation, and hindered economic growth worldwide also played a role.

• Rising Energy Prices: Increased global energy prices, driven by geopolitical concerns, weighed on sentiment, especially for India, which relies heavily on imports.

Analyst Views

Analysts at Motilal Oswal Financial Services expect commodity volumes to normalize, assuming flat volumes in January 2026, followed by a 20% decline in February 2026.

Overall, the Indian stock market's rise on January 29, 2026, appears to be a multifaceted event influenced by a combination of global cues, domestic economic factors, and anticipation surrounding the upcoming Union Budget.