Q3 Earnings, US Fed Interest Rate Decision, Budget to Steer Market Movement: Analysts

Stock market is gearing up for an eventful week ahead where key triggers such as quarterly earnings from corporates, the US Fed interest rate decision and the upcoming Union Budget for 2026-27 would grab the limelight, analysts said.

Equity markets would be closed on Monday for Republic Day.

Moreover, trading activity of foreign investors, rupee-dollar trend and global trade related developments would also influence trading in the markets, experts said.

The Union Budget will be presented by Finance Minister Nirmala Sitharaman on February 1. The NSE and BSE will conduct live trading on Sunday, February 1, when the Budget is presented.

"This week is packed with important domestic and global triggers. On the domestic front, markets will track industrial production data, government budget-related fiscal indicators, and weekly foreign exchange reserves.

"The earnings season will also gain momentum, with key results from heavyweights such as Axis Bank, L&T, Maruti Suzuki, ITC, NTPC, and Bajaj Auto," Ajit Mishra – SVP, Research, Religare Broking Ltd, said.

Globally, focus will remain on key US macroeconomic releases and, more importantly, the US Federal Reserve’s interest rate decision, along with ongoing developments in global trade policies and central bank commentary, he added.

The rupee hit a historic low of 92-a-dollar on Friday.

"FPIs not only continued their selling spree in the week ended 23rd January, but also increased the intensity of their selling. Sentiments remained very weak due to a combination of factors such as sustained rupee depreciation, lack of any finality regarding US-India trade deal and unimpressive Q3 results, so far, which are not indicating any pick up in corporate earnings," VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.

Trend in global equity markets and crude oil movement would also be tracked by investors.

"The upcoming truncated week shortened by the Republic Day holiday on Monday kickstarts a critical phase. Trading resumes Tuesday with a potentially positive trigger from the India-EU FTA developments slated for January 27th. However, geopolitical uncertainties regarding Iran and Greenland remain significant headwinds," Santosh Meena, Head of Research at Swastika Investmart Ltd, said.

As global triggers previously took center stage, the narrative is now expected to shift toward the Union Budget. Markets will be scanning for growth-oriented measures to revive domestic and global investor sentiment, he said.

"As markets head into the pre-Budget and monthly derivatives expiry week, a mild technical rebound cannot be ruled out. Elevated FII short positions, oversold momentum indicators, and pre-Budget positioning could trigger bouts of short-covering," Ponmudi R, CEO - Enrich Money, an online trading and wealth tech firm, said.

He further said that investor expectations from the Union Budget are anchored around fiscal prudence, with the fiscal deficit seen at around 4.2–4.3% of GDP, alongside a continued thrust on capital expenditure—particularly in infrastructure, defence, and railways.

"Markets are also factoring in modest tax rationalisation, targeted sectoral incentives, and policy measures to support MSMEs and export-oriented sectors in the face of tariff-related challenges. Reforms aimed at improving capital market depth and efficiency also feature prominently on the investor wishlist, as participants look for policy clarity to anchor sentiment amid an uncertain global backdrop," Ponmudi said.

Last week, the BSE benchmark tanked 2,032.65 points or 2.43% and the NSE Nifty declined by 645.7 points or 2.51%.

Weak global cues, persistent FII outflows, a depreciating rupee, and subdued corporate earnings kept pressure elevated throughout the last week, Mishra of Religare Broking Ltd, said.

Sachin Neema, Fund Manager at Garud Investment Managers, said, while the ongoing earnings season has been a mixed bag so far, all eyes will be on the FM’s Budget speech on February 1 and its proposals for sectors given the delay in US-India trade agreement and the falling rupee.

"Beyond fiscal arithmetic, the Union Budget is expected to sustain its focus on supporting MSMEs facing tariff-related external pressures, pursue further rationalization of customs duties, maintain its emphasis on capital expenditure, and explore measures to incentivize job creation," Namrata Mittal, CFA, Chief Economist, SBI Mutual Fund, said on Budget expectations.

Provided there are no major tax shocks, the equity market is likely to see only limited impact from this year’s Budget, Mittal added.