Indian Markets Flat in Special Sunday Session Ahead of Budget 2026-27; Nifty at 25,301, Metals Slide 4.4%

Market Update at 10:08 AM: Indian equity markets traded largely muted in a special trading session on Sunday as investors stayed cautious ahead of the Union Budget 2026–27, due to be presented later in the day. Market participants are closely watching for continued government support to growth through capital expenditure and potential relief for export-oriented sectors impacted by U.S. tariffs.

As of 9:33 a.m. IST, the Nifty 50 slipped 0.08 per cent to 25,301.65, while the BSE Sensex edged up 0.01 per cent to 82,274.19. The debt and foreign exchange markets remained shut due to the special session.

Finance Minister Nirmala Sitharaman is scheduled to present the Union Budget for FY2026–27 at 11 a.m. IST.

Since the last budget, the benchmark Nifty 50 has gained 7.8 per cent, but it has underperformed both emerging markets and other Asian peers. This relative underperformance has been driven by record foreign investor outflows and subdued corporate earnings growth.

Sectoral performance remained weak, with nine of the 16 major indices trading in the red. The Nifty Metal index fell sharply by 4.4 per cent, tracking a decline in global metal prices amid a stronger USD and profit-booking after a recent rally.

The key trigger was U.S. President Donald Trump’s nomination of Kevin Warsh as the next Chair of the U.S. Federal Reserve. Warsh is widely seen as an inflation hawk and a strong proponent of the Fed’s independence, prompting investors to reassess future interest rate expectations and pushing the USD higher.

In contrast, Defence stocks outperformed, with the Nifty India Defence index rising 1.4 per cent on expectations of higher defence allocations in the budget, aligned with the government’s push to accelerate local manufacturing.

Broader markets underperformed the benchmarks, with the Nifty Smallcap index falling 1.8 per cent and the Nifty Midcap index declining 0.6 per cent, reflecting continued risk aversion among investors ahead of the budget announcement.

Pre-Market Update at 7:47 AM: The Indian stock market is set for heightened volatility today as Finance Minister Nirmala Sitharaman presents the Union Budget 2026–27 in Parliament. Benchmark indices Sensex and Nifty 50 are expected to witness sharp swings during the special trading session on February 1. Market participants are largely factoring in policy continuity rather than big-bang reform announcements.

Both the BSE and NSE are operating a special trading session today to coincide with the Union Budget presentation.

Indian equities ended lower on Friday, snapping a three-session winning streak amid profit booking. The Sensex declined 296.59 points, or 0.36 per cent, to close at 82,269.78, while the Nifty 50 fell 98.25 points, or 0.39 per cent, to settle at 25,320.65.

U.S. stock markets closed lower on Friday as investors reacted to President Donald Trump’s nomination of former Federal Reserve Governor Kevin Warsh as the next Federal Reserve Chairman, a move seen as hawkish. The Dow Jones Industrial Average fell 179.09 points, or 0.36 per cent, to 48,892.47, while the S&P 500 declined 29.98 points, or 0.43 per cent, to 6,939.03. The Nasdaq Composite dropped 223.30 points, or 0.94 per cent, to 23,461.82.

On a weekly basis, the S&P 500 rose 0.3 per cent, the Dow slipped 0.4 per cent and the Nasdaq declined 0.2 per cent. For January, the S&P 500 gained 1.4 per cent, the Nasdaq rose 0.9 per cent and the Dow rallied 1.7 per cent. Among stocks, Apple gained 0.43 per cent, Meta fell 3 per cent, Tesla jumped 3.3 per cent, Nvidia eased 0.72 per cent and AMD plunged 6.13 per cent. Verizon Communications surged 11.8 per cent, SanDisk jumped 6.9 per cent, while KLA Corp tumbled 15.2 per cent.

European markets ended higher on Friday as investors focused on corporate earnings. The pan-European Stoxx 600 closed 0.5 per cent higher, the FTSE 100 gained 0.51 per cent, and Germany’s DAX rallied 0.94 per cent.

U.S. President Donald Trump announced Kevin Warsh as his nominee for Chairman of the Board of Governors of the Federal Reserve System, set to succeed Jerome Powell once his term ends. The announcement reinforced expectations of a tighter monetary stance and weighed on global risk sentiment.

Gold and silver prices crashed sharply on Friday as investors booked profits amid a stronger U.S. dollar and a broader global sell-off. MCX gold cracked by Rs 33,113, or 18 per cent, to close at Rs 1,50,849 per kg, while MCX silver slumped by Rs 1,07,971, or 27 per cent, to Rs 2,91,922 per 10 grams.

The U.S. government entered a shutdown on Saturday after Congress failed to approve a funding deal ahead of the midnight deadline, according to a Reuters report. The shutdown is expected to be brief but added to global market uncertainty.

The U.S. dollar strengthened sharply following the Warsh nomination and recent inflation data. The dollar index rose 0.57 per cent to 96.73, while the euro weakened 0.54 per cent to USD 1.1904.

Bitcoin prices fell sharply amid thin liquidity and limited buying interest. Bitcoin dropped below the USD 80,000 mark, declining 6.6 per cent to USD 78,521.58, levels last seen in April 2025. Ether fell 10.2 per cent to USD 2,431.42.

Crude oil prices edged lower. Brent crude declined 0.39 per cent to USD 69.32 per barrel, while U.S. West Texas Intermediate crude futures slipped 0.32 per cent to USD 65.21 per barrel.

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Disclaimer: The article is for informational purposes only and not investment advice.