Markets keep winning streak alive before Budget
Equity markets extended their winning streak for the fourth consecutive session on Friday, fueled by expectations of a pro-growth budget and optimism around economic deregulation, with the BSE Sensex surpassing the 77,500 level and Nifty 50 closing above 23,500.
The 30-share BSE Sensex jumped 740.76 points or 0.97 per cent to close at 77,500.57, while the broader NSE Nifty 50 gained 258.90 points or 1.11 per cent to end at 23,508.40. The rally was supported by positive global cues following the European Central Bank’s decision to cut interest rates by 25 basis points.
“The Economic Survey 2024-25 reinforced confidence in India’s robust economic fundamentals, suggesting that the current investment slowdown is transient,” said Devarsh Vakil, Head – Prime Research, HDFC Securities.
Market breadth remained strongly positive with 2,719 stocks advancing and 1,203 declining on the BSE. Sixty-two stocks hit their 52-week highs, while 85 touched their 52-week lows. The broader markets outperformed the benchmarks, with Nifty Midcap Select rising 1.15 per cent and Nifty Next 50 gaining 1.50 per cent.
Pro-growth budget expectations
“The indices are fuelled with expectations of a pro-growth budget and prudent fiscal as indicated in the economic survey. Positive global cues and better-than-expected results from major companies are also contributed to the upward trend,” said Vinod Nair, Head of Research, Geojit Financial Services.
Among Nifty constituents, Tata Consumer Products emerged as the top gainer, surging 6.24 per cent, followed by Bharat Electronics (5.47 per cent), Trent (4.61 per cent), Coal India (4.49 per cent), and Larsen & Toubro (4.18 per cent). The laggards included Bharti Airtel (-0.82 per cent), ITC Hotels (-0.77 per cent), JSW Steel (-0.65 per cent), ICICI Bank (-0.21 per cent), and Bajaj Finserv (-0.16 per cent).
Sector-wise performance
Sector-wise, all indices finished in the green, with FMCG and Energy sectors leading the gains at nearly 2 per cent. The India VIX, which measures market volatility, declined by 6.56 per cent to 16.25, indicating overall market stability.
Prashanth Tapse, Senior VP (Research) at Mehta Equities, noted: “Markets maintained its upward bias for the fourth straight session as benchmark indices notched up splendid gains ahead of the important Budget announcement with strong global cues too aiding the sentiment. Equity markets received a boost after the ECB cut interest rates by 25 bps which also softened US bond yields.”
Additionally, Shrikant Chouhan, Head Equity Research at Kotak Securities, provided sectoral insights: “The Nifty-50 Index and Sensex each gained 1.6 per cent in the past week. While the mid-cap index gained around 0.3 per cent and small-cap index lost around 0.7 per cent in the past week. Sector-wise, Capital goods (+3.5 per cent), Auto (+3.0 per cent), Realty (+6.2 per cent), FMCG (+0.7 per cent) and Power (+1.0 per cent) ended in green. Major sectoral losers for the week include, IT (-1.9 per cent), Consumer Durable (-0.9 per cent), Metal (-0.5 per cent), Telecom (-2.5 per cent) and Pharma (-2.3 per cent).”
FPI outflows
Foreign portfolio investors (FPIs) were net sellers in the capital market segment, offloading equities worth ₹4,582.95 crore on January 30, 2025. Meanwhile, domestic institutional investors (DIIs) remained net buyers, investing ₹2,165.89 crore during the same period. Among other categories, proprietary traders recorded a net outflow of ₹68.99 crore, while clients also saw a net outflow of ₹8.31 crore. In contrast, non-resident Indians (NRIs) were net buyers with an inflow of ₹3.80 crore.
Technical outlook
“Having surpassed the hurdle of 23500 levels, bulls could advance towards another resistance of 23800 levels in a short period of time. Immediate support is at 23400 levels,” noted Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.
From a technical perspective, Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates Ltd, observed that “Nifty crossed its short-term hurdle of 23,430 and formed a strong bullish candle on the daily chart, indicating strength.”
Rupee performance
The Indian rupee traded flat near 86.63 against the US dollar, as market participants absorbed the U.S. Federal Reserve’s decision to keep interest rates unchanged. “With the Fed event behind, the primary focus now shifts to India’s upcoming budget and FII investment trends,” said Jateen Trivedi, VP Research Analyst at LKP Securities.
Market capitalisation data showed consistent growth through the week, with all-India market capitalisation reaching ₹41,874,921.63 crore as of January 30, 2025, while the top 10 companies’ market capitalization stood at ₹9,380,873.68 crore.
Economic Survey
The Economic Survey 2025, tabled in Parliament, projected growth of 6.3 per cent-6.8 per cent for FY26. “India’s economic trajectory remains robust, with a strong emphasis on deregulation, investment, and sectoral transformation,” said Bharat Dhawan, Managing Partner, Forvis Mazars in India.
“The Indian stock market’s wealth creation story has hit a roadblock, with many investors who thrived in 2024 now facing significant portfolio losses. As the Union Budget approaches, the critical expectation is to revive market sentiment,” observed Sunil Damania, Chief Investment Officer, Mojopms.
In global markets, the European Central Bank cut interest rates to 2.75 per cent, while German GDP declined 0.2 per cent in the final quarter. In the US, former President Trump confirmed plans to impose 25 per cent tariffs on imports from Mexico and Canada from February.
“Given the prevailing uncertainty, we recommend maintaining a cautiously optimistic stance and favoring hedged positions until the event unfolds,” advised Ajit Mishra, SVP Research at Religare Broking Ltd, referring to the upcoming budget announcement.
