Markets Flat Ahead of Budget; Volatility Cools as Investors Await Announcements

The benchmark Nifty 50 index opened at 25,345, registering a marginal gain of 2.25 points or 0.01 per cent. Meanwhile, the BSE Sensex opened at 82,368.96, up by 24.28 points or 0.03 per cent.

Market participants appeared cautious as they positioned themselves ahead of the Budget announcement, while indicators suggested a stable but guarded sentiment.

Ajay Bagga, Banking and Market Expert, told ANI, "Volatility is cooling as the India VIX settled near 13.5-14, and the Nifty PCR (Put-Call Ratio) stands at a balanced 0.70, indicating cautious but stable positioning ahead of the Union Budget 2026. Investors are eyeing the February 1st announcement with expectations for a 4.2 per cent fiscal deficit target, continued infrastructure CAPEX, and potential AI-focused incentives."

He further added, "Currencies, Oil and Metals are the stories of the day. US Dollar moves are roiling policy makers' outlooks, Oil is surging due to the high probability of a joining Israeli-US attack on Iran and Metals are seeing a bumper year."

In the broader market on the National Stock Exchange (NSE), indices showed mixed trends. The Nifty 100 slipped by 0.19 per cent, while the Nifty Midcap 100 edged up by 0.10 per cent. The Nifty Smallcap index outperformed, gaining 0.51 per cent.

Sectoral indices on the NSE opened mostly in the red, except for the Nifty Metal and PSU Bank indices. The Nifty Auto index declined by 0.70 per cent, Nifty FMCG fell by 0.54 per cent, and Nifty IT was down by 0.95 per cent in early trade.

Global markets reflected a mix of caution and resilience following the first US Federal Reserve meeting of the year. The Fed kept interest rates unchanged at 3.5 per cent to 3.75 per cent and signalled a data-dependent approach as inflation remains sticky.

In the US, the S&P 500 briefly crossed the historic 7,000 mark but closed flat, while the Nasdaq gained 0.17 per cent, supported by strong buying in AI chip stocks.

Commodities remained in focus, with gold hitting a record high and nearing USD 5,600 per ounce in some markets amid safe-haven demand and a weakening US Dollar. Oil prices also climbed to a four-month peak, with Brent settling near USD 68.40 due to rising geopolitical tensions in the Middle East and a surprise draw in US inventories.

In other Asian markets, a mixed trend was visible. Japan's Nikkei 225 opened with a marginal gain of 0.03 per cent, Hong Kong's Hang Seng index rose by 0.6 per cent, South Korea's KOSPI gained 0.98 per cent, while Taiwan's weighted index declined by 0.48 per cent.

- ANI