As the Union Budget discussions kick off, the Indian stock market is showing positive momentum, with both the Sensex and Nifty indices experiencing gains. On February 1, 2025, the BSE Sensex rose by 136.44 points, or 0.18%, closing at 77,637.01. Meanwhile, the Nifty climbed by 20.20 points, or 0.09%, reaching 23,528.60.
Investor Optimism
The market’s upward trend comes just hours before Finance Minister Nirmala Sitharaman is set to present her eighth consecutive budget. Despite low expectations from this year’s budget, analysts believe that the recent rally might indicate that the market is nearing a bottoming out phase. A majority of stocks saw positive movement, with approximately 2,320 shares advancing compared to 737 that declined.
Market experts are hopeful that the budget will focus on improving conditions for micro, small, and medium enterprises (MSMEs) and include pro-growth measures aimed at enhancing domestic supply chains and boosting investments in clean technology. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, emphasized that investors are looking for growth-stimulating initiatives rather than mere tax reliefs.
Key Expectations
There is considerable anticipation surrounding potential cuts to personal income tax, which could provide much-needed relief to the middle class and stimulate consumption. However, analysts caution that significant tax relief may be limited due to fiscal constraints.
Recent data indicates that the Sensex has gained over 2,130 points in just four days leading up to the budget announcement, reflecting a strong sense of momentum in the market. Jefferies, a foreign brokerage firm, suggested that the Nifty might find a bottom before February 7 if no unexpected tax changes are introduced in the budget.
Sector Performance
In terms of sector performance, stocks in banking, defense, and infrastructure have been particularly active. Companies like IndusInd Bank and UltraTech Cement have seen notable gains as investors remain optimistic about increased government spending in these areas.
Technical analysts are also optimistic about future growth prospects as long as the Nifty remains above key support levels. They believe that a decisive move above 23,550 could lead to further rallies.
Stock Market Reacts Positively Ahead of Budget 2025
As traders and investors await Sitharaman’s budget speech, today’s market performance is a glimpse of what’s to come. The Sensex and Nifty are both showing strong gains, reflecting optimism in the lead-up to Budget 2025-26.
Expectations are high for growth-focused policies and strategic investments. As the budget is announced, all eyes will be on how these decisions impact the market and shape the economy in the days ahead.
