Growth Outlook Bright
India's economy is expected to maintain a robust growth trajectory. The IMF has revised its growth forecast for India to 7.3% in fiscal year 2026, despite
global trade concerns. SBI Research anticipates India becoming an upper middle-income country by 2030, with a $5-trillion economy expected in the next two years. Moody's also projects India to grow at 7.3% in fiscal year 2026. This positive outlook is supported by factors such as rising insurance demand and the ongoing digitalization of payments, with digital payments hitting 22,831 crore in fiscal year 2025, reflecting a 41% CAGR.
Market Volatility Observed
Recent stock market performance has shown volatility. The Sensex experienced significant declines, with a drop of over 1,400 points in two days, and the Nifty fell below 25,200. On January 19, the Sensex dropped 1,065 points, closing at 72,000, and the Nifty closed below 25,250. Key factors behind these declines included profit booking in stocks like ICICI Bank and HDFC Bank after Q3 results. Market sentiment was further impacted by tariff concerns, as seen with Gift Nifty slips. These fluctuations highlight the importance of understanding market dynamics for investors.
Banks' Performance Analysis
Several major banks have reported their Q3 results. HDFC Bank's net profit rose by 11.4% year-on-year to reach Rs 18,653.75 crore, and its net interest income (NII) increased by 6.4%. ICICI Bank's net profit experienced a 4% year-on-year decline to Rs 11,317.86 crore. Yes Bank's net profit surged by 55.4% year-on-year to Rs 952 crore, with NII rising by 10.9%. RBL Bank's net profit skyrocketed by 5.5 times to Rs 214 crore due to declining provisions. These results reflect varying performances across the banking sector.
Budget 2026 Expectations
Expectations are high for Budget 2026, slated for February 1. Experts anticipate the government might cap the fiscal deficit at 4.3% and push for medium-term debt consolidation. There is also anticipation of potential changes to the tax regime, with discussions on whether to phase out the old tax regime. Budget recommendations call for supporting MSMEs and critical minerals to boost trade resilience. KPMG advocates for tax clarity and faster dispute resolution to ease business operations. The real estate industry is calling for tax relief and stable policies. Morgan Stanley has highlighted key reforms needed across auto, telecom, railways, and defense sectors.
Real Estate Trends
The real estate sector shows positive signs. Capital inflows into India's real estate sector surged by 25% to a record $14.3 billion in 2025. Real estate sentiment stabilized in Q4 2025, aided by office demand and funding outlook. Gurugram attracted substantial real estate investments, totaling Rs 86,588 crore in 2025, with RERA clearing 131 projects. Reports suggest that office occupancy in Delhi-NCR is expected to surpass 80% by 2027. IKEA is planning to double its investment in India, investing over Rs 20,000 crore in the next five years, indicating strong confidence in the market.
IPO and Market Activity
Several IPOs are attracting attention. The Bharat Coking Coal IPO's GMP surged ahead of its listing, with the IPO being fully subscribed within 1 hour on its first day. The Shadowfax IPO has shown modest subscription so far. The NSE IPO nears regulatory clearance, with the SEBI chief signaling a possible NOC within the month. SEBI’s IPO nod feels ‘divine,’ according to NSE CEO Ashish Chauhan after Tirupati visit. The performance of these IPOs will be closely watched by investors. Market movements were also influenced by silver prices, with silver ETFs jumping 8% as prices hit record highs.
Silver, Gold Price Update
Gold and silver prices have been making headlines. Silver prices recently crossed Rs 3 lakh, hitting record highs, while gold also reached fresh record highs. The reasons behind the soaring silver prices include global uncertainty stemming from trade tensions and geopolitical events. On January 19, silver prices fell by Rs 4,000/kg on MCX due to a stronger US dollar. Silver ETFs have seen significant gains. Investors are closely monitoring the bullion market. If an investor were to invest Rs 1 lakh in silver today, the potential profit by December is a significant area of focus for many.
