Market Outlook: Union Budget Special | 1st February 2026

The Indian equity market is witnessing a rare Sunday trading session, with the Union Budget taking center stage. The Budget presentation begins at 11:00 AM, and markets are expected to remain volatile as investors closely watch policy announcements amid ongoing global trade and geopolitical concerns. The expectation is that the Budget will remain fiscally prudent, while introducing targeted measures to support economic growth, especially in sectors linked to infrastructure, defense, manufacturing, consumption, and public enterprises. Global cues remain mixed, with US markets closing lower on Friday following developments related to the Federal Reserve leadership. A sharp correction in precious metals such as gold and silver has also added pressure. Early indicators suggest a flat to mildly positive opening. Key Market Data Snapshot Global Markets Dow Jones: Negative close GIFT Nifty: Mildly positive Indian Indices Nifty 50: Trading near 25,300 Sensex: Around 82,200 Institutional Activity Domestic Institutions: Net buyers Foreign Institutions: Marginal net sellers Volatility Index (VIX): Moderately low, indicating controlled volatility Put Call Ratio (PCR): Below 1, suggesting cautious sentiment Sectoral Actionable View Instead of individual stocks, focus is advised on the following sectors: Defense & Aerospace Infrastructure & Capital Goods Banking & Financial Services Public Sector Enterprises Consumption-Oriented Sectors Derivatives & Technical Outlook Nifty Index Support zone: 25,000 – 25,200 Resistance zone: 25,500 – 25,850 Broader trading range expected: 24,800 – 25,800 Holding above 25,300 is crucial for upside momentum Banking Index Support: 59,250 – 58,750 Resistance: 60,000 – 60,500 Momentum visible at lower levels, consolidation at higher zones Union Budget 2027: Expectations & Themes The upcoming Budget is expected to prioritize economic insulation from global uncertainties, along with strategic long-term planning. Macro Expectations Fiscal deficit likely between 4.2% – 4.3% GDP growth projected around 7.2% No major changes expected in income tax or GST structure Key Sectoral Focus Areas Defense Higher allocation expected due to rising geopolitical tensions, benefiting defense manufacturing and allied industries. Infrastructure, Housing & Cement Increased spending expected to boost employment and rural development ahead of upcoming state elections. Renewable & Green Energy Strong push anticipated for solar, wind, green corridors, and clean energy financing. Rare Earth & Strategic Minerals Focus on reducing import dependence and supporting EV, defense, and renewable supply chains. Small Modular Nuclear Power Policy support expected for clean energy transition and long-term energy security. NBFCs, FMCG & Two-Wheelers Rural-focused spending may improve consumption and credit demand. Fertilizers & Agriculture Inputs Higher subsidies likely to boost rural demand and farm income. Railways & Logistics Continued emphasis on modernization, safety, and freight infrastructure. Healthcare & Insurance Potential increase in healthcare allocation, insurance accessibility, and cost rationalization. Technology, AI & MSMEs Encouragement for digital adoption, AI tools, SaaS platforms, and cyber security. Electric Vehicles Support expected for manufacturing, batteries, recycling, and charging infrastructure. Market Strategy for Investors Expect high intraday volatility during and after the Budget Avoid aggressive trades until clarity emerges Prefer sector-based positioning rather than stock-specific bets Focus on long-term structural themes aligned with government policy Disclaimer This blog is published for educational and informational purposes only. The views expressed are personal market opinions based on publicly available information and market data. We are not SEBI registered investment advisors. Readers are advised to consult their financial advisor before making any investment decisions. Investments in securities markets are subject to market risks.