Indian equities wrapped up the week on a cautious note, with benchmark indices swinging between gains and losses amid global trade worries, foreign fund
outflows, and pre-Budget anxiety. After a brief recovery earlier in the week, markets reversed course on Friday as traders booked profits and moved to the sidelines ahead of key domestic and global events. The Sensex slipped sharply by 770 points, or 0.94 per cent, to close at 81,537.70, while the Nifty 50 declined 241 points, or 0.95 per cent, ending the session at 25,048.65. The pullback came a day after both indices had posted gains of around half a per cent. Market Mood Turned Defensive Persistent geopolitical risks, caution ahead of the Union Budget 2026, and an uneven Q3 earnings season combined to keep investors wary. Broader markets underperformed the frontline indices, reflecting a clear risk-off approach. “ Indian equities resumed their downward trajectory after witnessing a small recovery on Thursday. Nifty fell by 241 points (-1 per cent) to close just above the 25k levels at 25,048, dragged by a sharp decline in several heavyweights. Stock-specific action continued on the back of mixed Q3 results so far. The broader markets underperformed with Nifty Midcap100 and Smallcap100 down 1.8 per cent and 2 per cent, respectively, as investors adopted a cautious stance amid overall market weakness,” said Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services, as per a Mint report. Stock Market Outlook Next Week Looking ahead, market participants will navigate a busy calendar that includes the Union Budget, derivatives expiry, and global policy cues. Ponmudi R, CEO of Enrich Money, states in the report that while a short-term technical bounce is possible, sustainability remains uncertain. “ Investor expectations from the Union Budget are anchored around fiscal prudence, with the fiscal deficit seen at around 4.2–4.3 per cent of GDP, alongside a continued thrust on capital expenditure—particularly in infrastructure, defence, and railways. Markets are also factoring in modest tax rationalisation, targeted sectoral incentives, and policy measures to support MSMEs and export-oriented sectors in the face of tariff-related challenges. Reforms aimed at improving capital market depth and efficiency also feature prominently on the investor wishlist, as participants look for policy clarity to anchor sentiment amid an uncertain global backdrop,” Ponmudi said. Key Triggers To Watch In The Coming Week Union Budget 2026: Finance Minister Nirmala Sitharaman is set to present the Union Budget on Sunday, February 1, making it the single biggest driver for markets in the days ahead. US Federal Reserve Meeting: The Federal Open Market Committee meets between January 27 and 28, with expectations largely tilted toward a pause on interest rates. Q3 Earnings Season: Several heavyweight companies, including L&T, ITC, Maruti Suzuki, Adani Enterprises, Axis Bank, GAIL, and NTPC, are scheduled to announce their Q3 FY26 results. India–US Trade Developments: Optimism around a potential trade deal resurfaced after US President Donald Trump said he is hopeful of a “good trade deal” with India, praising Prime Minister Narendra Modi as a “fantastic leader”. Geopolitical Risks and Commodity Moves: Uncertainty over a reported US–NATO agreement involving Greenland continues to cloud global sentiment. Meanwhile, gold surged close to $5,000 an ounce and silver hit record highs, underscoring the shift toward safe-haven assets.
