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Benchmarks likely to get cautious start ahead of Budget 2025
Feb-01-2025

Indian equity benchmarks are likely to get a cautious start ahead of the Budget 2025 proposals during a special trading session coupled with weakness on Wall Street overnight. Finance Minister Nirmala Sitharaman will present her eighth consecutive budget today.

Some of the key factors to be watched:

Key infra sectors’ growth slows to 4% in December 2024: The output of eight key infrastructure sectors slowed down to 4 per cent in December 2024, as against 5.1 per cent growth registered a year ago.

India's forex reserves rise to $629.55 billion: The Reserve Bank said India's forex reserves increased $5.574 billion to $629.557 billion in the week ended January 24. In the previous reporting week, the overall kitty had dropped $1.888 billion to $623.983 billion.

India's fiscal deficit reaches 56.7% of target: The government data showed India's fiscal deficit for April-December was Rs 9.14 trillion ($105.58 billion), or 56.7% of the estimate for the financial year.

Banking stocks will be in focus: Reserve Bank data showed bank credit to personal loan segment moderated to 14.9 per cent year-on-year in December, largely due to decline in growth in other personal loans, vehicle loans and credit card outstanding.

Sugar stocks will be in limelight: National Federation of Cooperative Sugar Factories (NFCSFL) has projected sugar production in India to drop 15 per cent to 27-27.2 million tonnes in the ongoing 2024-25 season ending September.

On the global front, the US markets ended lower on Friday with indexes losing ground after the White House said U.S. President Donald Trump will implement on Saturday tariffs of 25% on Canadian and Mexican imports and 10% on Chinese goods.

Back home, Indian equity benchmarks continued their northward march for the fourth consecutive session on Friday, with optimism around upcoming Union Budget and expectations for a rate cut by RBI next week helping underpin sentiment. Finally, the BSE Sensex rose 740.76 points or 0.97% to 77,500.57, and the CNX Nifty was up by 258.90 points or 1.11% to 23,508.40.

Some of the important factors for the markets:

Economic survey positively impacted market momentum: The Economic Survey 2024-25 tabled in Parliament said India is expected to record GDP growth of 6.3-6.8 per cent in the financial year 2025-26 on the back of strong fundamentals, calibrated fiscal consolidation and stable private consumption. 

Impressive Q3 numbers from Indian Inc: Better-than-expected results from major companies contributed to upward trend. Larsen & Toubro (L&T), Punjab National Bank (PNB), GAIL (India) and Biocon reported good set of numbers.  

Shares of railway stocks experienced sharp uptick: Shares of railway-related stocks witnessed a strong rally, fueled by expectations that the upcoming budget will allocate increased capital expenditure (capex) to Indian Railways. 

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