Nifty Gains 1.11% as Markets Await Union Budget

The Indian stock market ended the trading session on January 31, 2025, with strong gains, fueled by optimism surrounding the upcoming Union Budget. The benchmark indices rallied for the fourth consecutive session, with the Sensex gaining 741 points and the Nifty crossing the 23,500 mark. Market sentiment remained bullish, driven by strong sectoral performances and expectations of a pro-growth budget.

Market Performance Overview

At market close, the Sensex stood at 77,500.57, up by 740.76 points (0.97%), while the Nifty 50 rose 258.90 points (1.11%) to 23,508.40. The Nifty Bank index gained 275.25 points (0.56%), closing at 49,587.20.

Top Gainers and Losers

Biggest Gainers on Nifty

  1. Tata Consumer Products: ₹1,024.65 (+5.99%)
  2. Trent
  3. Bharat Electronics
  4. Nestlé India
  5. Larsen & Toubro (L&T)

Biggest Losers on Nifty

  1. Bharti Airtel: ₹1,626.30 (-0.88%)
  2. ICICI Bank
  3. Bajaj Finserv
  4. Apollo Hospitals
  5. JSW Steel

Sectoral Performance

All sectoral indices ended in positive territory, reflecting broad-based buying across the market. The top-performing sectors were:

  • Consumer Durables: +2%
  • Oil & Gas: +2%
  • Power: +2%
  • PSU Stocks: +2%
  • Realty: +2%
  • FMCG: +2%
  • Capital Goods: +3.9%

BSE Midcap and Smallcap indices also gained nearly 2% each, indicating strong participation from mid and small-cap stocks.

Market Sentiment Ahead of Union Budget

The market’s bullish trend was largely attributed to expectations of a pro-growth Union Budget, which is expected to include measures to boost individual income tax reductions, job creation, and infrastructure spending. Investors are keenly watching government policies regarding fiscal deficit reduction while maintaining economic growth momentum.

According to Vinod Nair, Head of Research at Geojit Financial Services, the market is optimistic about a fiscally prudent budget, ensuring infrastructure investment while maintaining growth objectives.

Technical Analysis of Nifty

Senior Technical Analyst Rupak De of LKP Securities highlighted that the Nifty index has given a falling wedge breakout, indicating a short-term bullish reversal. The index has also moved above the 21-period Exponential Moving Average (EMA), supporting strong upside momentum.

Key Support and Resistance Levels

  • Support Levels: 23,300 – 23,200
  • Resistance Levels: 23,600 – 23,800

With the Relative Strength Index (RSI) in positive territory, a further upward movement could be seen. However, much will depend on the budget announcements and market reactions in the coming sessions.

Institutional Activity

Foreign Portfolio Investors (FPIs) were net sellers over the past week, while Domestic Institutional Investors (DIIs) continued to buy equities, supporting market gains.

According to Shrikant Chouhan, Head of Equity Research at Kotak Securities, the market remains subdued ahead of the FY26 Union Budget, though a broader rally is evident in key sectors.

Global Market Impact

Global factors also played a role in India’s stock market gains:

  • Federal Reserve Policy: The US Federal Reserve held interest rates steady, keeping investor sentiment positive.
  • European Central Bank (ECB) Rate Cut: ECB cut interest rates by 25 basis points, reducing borrowing costs and boosting global equities.
  • China’s Economic Developments: Investors closely watched developments around Chinese artificial intelligence firm DeepSeek, which impacted global tech stocks earlier in the week.

Key Market Trends and Takeaways

  1. Capital Goods, Realty, and Auto stocks lead the rally: The Capital Goods index gained nearly 3.5%, while Realty stocks surged 6.2%.
  2. Nifty Energy Index up 2.63%: Driven by strong demand in the power and oil & gas sectors.
  3. Nifty Pharma underperforms: The worst-performing sector gained only 0.09%, reflecting mixed sentiment in healthcare stocks.
  4. Earnings Season Update: Q3FY25 earnings have been broadly in line with expectations, though management commentary remains cautious.

Expert Opinions on Market Outlook

Prashanth Tapse, Senior VP (Research), Mehta Equities, noted that the market’s bullish trend is likely to continue in anticipation of a budget-driven rally. However, traders will remain cautious on potential economic policy shifts.

Looking ahead, traders and investors will focus on key government announcements, global economic trends, and corporate earnings reports to gauge market direction.

Conclusion

The Indian stock market continued its bullish run on January 31, with Sensex and Nifty hitting fresh highs ahead of the FY26 Union Budget. Strong global cues, sectoral strength, and institutional activity contributed to the rally. Market participants will now shift focus to budget announcements and their potential impact on economic growth, taxation, and fiscal policy.

Stay tuned for further updates as the market reacts to the Union Budget 2025.

ALSO READ: Top Deals & Earnings in Q3 FY 2025

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