Market Overview:

Indian equity markets ended on a flat note following the Union Budget 2025, as investors digested key fiscal announcements. Benchmark indices saw subdued movement, with mixed sentiment across sectors.

• Sensex: +0.01% at 77,505.96

• Nifty 50: -0.11% at 23,482.15

• Nifty Midcap 150: -0.39% at 19,773.40

• Nifty Smallcap 250: +0.66% at 15,955.45

Market volatility eased significantly, with India VIX plunging 13.24% to 14.10, reflecting reduced uncertainty in the post-budget session.

Sectoral Performance:

Top Gaining Sectors:

• Nifty FMCG: +3.01%

• Nifty Auto: +1.91%

• Nifty Realty: +1.80%

Weakest Sectors:

• Nifty IT: -1.48%

• Nifty Financial Services 25/50: -0.53%

• Nifty Financial Services: -0.22%

Key Stock Movers:

Top Gainers:

• Hindustan Unilever

• ITC

• Trent

Top Losers:

• Bharat Electronics

• HDFC Life

• SBI Life

Market breadth remained neutral, with 1,295 stocks advancing versus 1,412 stocks declining, reflecting a stock-specific approach by investors.

Key Takeaways from the Union Budget 2025:

1. Growth-Oriented Focus:

The government emphasized infrastructure development, manufacturing, and digital innovation, aiming to sustain India’s high GDP growth trajectory.

2. Boost for Key Sectors:

• Railways & Infrastructure: A significant allocation was announced for railway modernization and smart city projects.

• FMCG & Consumer Spending: Increased rural expenditure and tax incentives for the middle class supported demand-driven growth.

• Auto & Electric Vehicles: Policy support for EV manufacturing and battery storage solutions provided a positive outlook for the auto sector.

3. Capital Markets & Fiscal Policy:

• The government maintained fiscal prudence while focusing on growth, balancing capital expenditure with revenue measures.

• No major changes to capital gains tax provided relief to equity investors.

4. Digital Economy & Financial Services:

• Enhanced focus on AI, fintech, and blockchain adoption to strengthen India’s position as a global technology hub.

• Reforms in banking and insurance penetration strategies were introduced to deepen financial inclusion.

5. FDI & Global Trade Policies:

• Measures were announced to attract foreign investment, particularly in manufacturing and renewable energy.

• The government outlined policies to navigate global trade challenges, including Trump’s tariffs on Canada, Mexico, and China.

Global Economic Calendar & Key Events:

• 1st Feb:

• Union & Railway Budget 2025

• Implementation of new F&O rules

• January Auto Sales Data (expected to be weak)

• 5th Feb: Delhi Elections 2025 voting

• 7th Feb: RBI Monetary Policy Committee (MPC) Meeting

• 8th Feb: Delhi Election Results 2025

Market Outlook:

• Sectors benefiting from the budget: Infrastructure, Railways, FMCG, and Capital Goods.

• Investor sentiment remains cautious as markets assess the long-term impact of budget policies.

• Global trade concerns and upcoming RBI policy decisions could influence short-term market direction.

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