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Indian Markets Gain 1% Ahead of Budget 2026 Amid Volatile Week

Indian equity benchmarks posted weekly gains of around 1% despite ending the final trading session in negative territory due to volatility and foreign institutional investor outflows. Sectoral performance was mixed, with metals and oil & gas leading gains while consumer services, hardware, and FMCG stocks declined. Market sentiment was supported mid-week by a favourable economic survey reinforcing strong growth expectations for FY27. Analysts expect markets to remain event-driven, with the upcoming Union Budget serving as the key domestic trigger, while global cues will influence export-oriented sectors.

Key Points: Indian Stock Market Weekly Gains Ahead of Union Budget 2026

  • Nifty gained 1.09% for the week
  • Metals and oil & gas were top gainers
  • FMCG, media, and software stocks declined
  • Broader midcap and smallcap indices outperformed
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Indian stock markets gain this week ahead of Budget 2026

Indian equity benchmarks rose 1% in a volatile week ahead of Budget 2026-27. Key sectors like metals gained, while FMCG and IT declined. Full analysis.

"markets remain wary that a potentially stronger inflation focus could prolong tight financial conditions - Analysts"

Mumbai, Jan 31

The Indian equity benchmarks gained around 1 per cent during the week, though the trading sessions were volatile but with a cautiously constructive tone amid mixed global cues and rising geopolitical tensions.

Risk appetite weakened toward the end of the week ahead of the Union Budget 2026-27, with volatility resurfacing amid sustained FII outflows and rupee depreciation leading to losses in the last trading session.

Nifty added 1.09 per cent during the week and dipped 0.39 per cent on the last trading day to 25,320. At close, Sensex was down 296 points or 0.36 percent at 81,537. It added 0.90 per cent during the week.

Sectoral indices traded mixed this week with diversified consumer services stocks and hardware tech stocks logging the worst-performance, dipping 2.5 to 3.7 per cent. FMCG, media and software stocks slide over 1 per cent.

Metal stocks as well as oil and gas were the top weekly gainers up over 2 per cent, however Nifty metal index plummeted over 5 per cent on the last trading session. Profit booking also intensified in IT amid a firmer dollar and global liquidity concerns, and caution over incoming Fed Chair, analysts said.

Select pockets of weakness were observed in autos and beverages amid intensifying competitive pressures.

Broader indices posted stronger gains during the week, with the Nifty Midcap100 up 2.25 per cent, while Nifty Smallcap100 gained 3.2 per cent.

The markets opened the week with a subdued sentiment due to renewed tariff-related concerns and mixed corporate earnings, although optimism surrounding the India-EU trade agreement lent support, particularly to trade-oriented sectors.

Market sentiment improved mid-week following a favourable economic survey that reinforced expectations of robust FY27 growth and a benign inflation outlook.

Analysts said that markets remain wary that a potentially stronger inflation focus could prolong tight financial conditions and weigh on emerging markets.

Looking ahead, markets are expected to remain largely event-driven, with the Union Budget acting as the key domestic trigger, they said.

Cyclical sectors may continue to show relative resilience if supported by policy measures, while IT and export-oriented stocks are likely to remain sensitive to global macro cues, analysts added.

- IANS

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Reader Comments

P
Priya S
The volatility at the end is worrying. Sustained FII outflow is a red flag. The government needs to address this in the Budget with policies that attract long-term foreign investment, not just hot money.
R
Rohit P
As someone invested in IT stocks, the last few sessions have been painful. A firmer dollar should help, but global uncertainty is too high. Budget better have something for the tech sector!
S
Sarah B
Interesting analysis. The mixed sectoral performance shows a selective market. The resilience in metals and oil & gas is surprising given global tensions. Hope the Budget provides clearer direction.
V
Vikram M
Broader market outperforming is the real story here. Main indices are not reflecting the full picture. Retail participation is driving smallcaps. Hope this momentum continues post-Budget. 💹
K
Karthik V
With respect, the article downplays the risks. Profit booking in metals and IT shows smart money is exiting before the Budget. The "cautiously constructive" tone feels a bit optimistic. Let's see what FM has in store.

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