Indian stock markets are poised for a higher opening today, February 1, 2026, ahead of the presentation of the Union Budget by Finance Minister Nirmala Sitharaman. This special trading session marks only the second time since India's independence that the stock markets will be open on a Sunday for the budget. The previous instance was on February 28, 1999.
GIFT Nifty futures closed at 25,443 on Friday, signaling that the NSE Nifty 50 is likely to open above its previous close of 25,320.65. While the debt and foreign exchange markets remain closed, investors are keenly awaiting cues from the budget regarding government support for economic growth through capital expenditure and relief measures for export-oriented sectors impacted by U.S. tariffs.
Since the last budget, the benchmark Nifty 50 has seen a gain of 7.8%. However, it has underperformed compared to emerging market and Asian peers due to record foreign outflows and muted corporate earnings. In January, both the Nifty and Sensex fell, marking their worst monthly performance in 11 months. Weak earnings, U.S. trade concerns and approximately $4 billion in foreign outflows contributed to this decline, also pushing the rupee to record lows.
The Economic Survey, released on Thursday, forecasts India's economy to grow between 6.8% and 7.2% in fiscal year 2027, which is slightly slower than the projected 7.4% growth for fiscal year 2026.
Anticipations are that the budget will strike a balance between sustaining public capital expenditure momentum and adhering to the path of fiscal consolidation. Analysts also expect targeted measures to support export-oriented sectors facing U.S. tariff pressures, alongside a potential increase in defense spending to boost domestic manufacturing.
A supportive budget could act as a catalyst for equities, particularly after a subdued start to 2026. Higher capital outlays could potentially lift industrials and infrastructure stocks, while measures aimed at boosting rural demand may benefit consumer companies.
The market will be closely watching for any significant announcements from Finance Minister Sitharaman that could boost market confidence. Specifically, the focus will be on fiscal discipline, potential changes to capital gains taxation, and visible capital expenditure numbers. Many hope the government will stay on its fiscal consolidation path to reassure investors that macro stability remains intact. Avoiding negative surprises, such as increased long-term capital gains tax, would also be seen as a relief.
