Q3 Earnings, Fed Rate Decision, Budget to Steer Dalal Street This Week
The upcoming week promises to be pivotal for the stock market, with significant influences expected from corporate quarterly earnings, the U.S. Federal Reserve’s interest rate decision, and the upcoming Union Budget for 2026-27. Analysts anticipate a series of major triggers that will capture investors’ attention.
Key Factors Affecting the Market
– Market Closure: Trading will be paused on Monday in observance of Republic Day.
– Foreign Investments and Currency Trends: The movement of foreign investors, fluctuations in the rupee against the dollar, and developments in global trade will play crucial roles in market behavior.
– Union Budget Presentation: Finance Minister Nirmala Sitharaman will unveil the Union Budget on February 1, with live trading scheduled on both the NSE and BSE that day.
Earnings Season and Notable Releases
The earnings season is expected to gain traction, featuring results from heavyweight companies including:
– Axis Bank
– L&T
– Maruti Suzuki
– ITC
– NTPC
– Bajaj Auto
Ajit Mishra, SVP of Research at Religare Broking Ltd, highlights that the focus will also be on key U.S. macroeconomic releases, particularly the Federal Reserve’s interest rate decision, along with developments in global trade policies.
Current Market Sentiment
– Rupee Weakness: The rupee recently plummeted to a historical low of 92 to the dollar.
– Foreign Portfolio Investors (FPIs): FPIs continued their selling streak, intensifying the trend last week due to a mix of factors, including the rupee’s decline and disappointing Q3 results that suggest a slowdown in corporate earnings, according to VK Vijayakumar, Chief Investment Strategist at Geojit Investments.
Investor Outlook and Budget Expectations
Analysts are closely monitoring global equity trends and crude oil prices, especially as the week is shortened by the Republic Day holiday. Santosh Meena, Head of Research at Swastika Investmart Ltd, notes that geopolitical issues, particularly involving Iran, may present challenges.
As the discussions shift to the Union Budget, market participants are eager for measures aimed at reviving both domestic and international investor confidence.
– Fiscal Expectations: Investors expect the Budget to maintain fiscal prudence, with projections of a fiscal deficit around 4.2-4.3% of GDP, and continued investment in infrastructure, defense, and railways.
– Tax Policies: Anticipations include modest tax reforms aimed at stimulating growth in sectors facing tariff challenges.
– Support for MSMEs: Policy actions encouraging the growth of micro, small, and medium enterprises (MSMEs) are also expected.
As the markets gear up for the pre-Budget phase, Ponmudi R, CEO of Enrich Money, suggests a potential technical rebound could develop due to oversold conditions and the framing of the Budget.
Market Performance
Last week concluded with the BSE benchmark declining by 2,032.65 points (2.43%), and the NSE Nifty dropping by 645.7 points (2.51%), largely influenced by weak global indicators, continuous FII outflows, a depreciating rupee, and underwhelming corporate earnings, according to Mishra.
Conclusion
As we head into a critical week defined by Q3 earnings, the Federal Reserve’s interest rate decision, and the Union Budget, the focus will be on how these elements impact Dalal Street. With hopes for growth-oriented policies and fiscal measures, the market’s reaction will be closely watched. Keeping an eye on investor sentiments and external factors will be essential as we navigate this pivotal landscape.