Week Ahead: Budget 2025, US Fed Policy, Q3 Results, F&O expiry, auto sales among key market triggers for Nifty | Stock Market News

The Indian stock market awaits an eventful week brimming with triggers, including key macroeconomic data, government policy verdicts, and important corporate earnings reports that will shape market sentiment.

Investors will monitor key market triggers in the last week of January, with markets entering the second month of 2025. The next set of December quarter earnings for the current fiscal 2024-25 (Q3FY25), Budget 2025 and economic survey, scheduled expiry of January’s derivative contracts, US Federal Reserve policy verdict, auto sales figures, domestic and global macroeconomic data, foreign fund outflows, crude oil prices and global cues.

Domestic equity benchmarks Sensex and Nifty 50 continued their downward trajectory for the third consecutive week, grappling with persistent technical and fundamental headwinds amid rising concerns over slowing corporate earnings.

Also Read: ICICI Bank in focus: Should you buy, sell, or hold India’s second-largest private bank’s stock after Q3 results?

The frontline indices breached their critical psychological levels of 23,000 and 76,000, respectively, before recovering slightly to end the week with losses of approximately 0.50 per cent. All major indices are trading below their crucial 200-day EMA, underscoring sustained bearish momentum.

Caution prevailed from the start, fueled by concerns over potential volatility in global markets ahead of Donald Trump’s inauguration, given his past remarks on trade tariffs and ‘America First’ policies. Nifty and Sensex fluctuated sharply within a range before closing at 23,092.20 and 76,190.46, respectively. 

On a weekly basis, the BSE index declined 428.87 points or 0.55 per cent, and the Nifty dipped 111 points or 0.47 per cent. On the sectoral front, most sectors faced pressure, with the realty index plummeting over nine per cent, followed by losses in energy and auto. 

Analysts said the bulls failed to capitalize on them despite favourable conditions for a comeback. Earlier, the primary concern was the rising dollar, which has maintained a negative correlation with Nifty in the past several months. 

Also Read: Union Budget 2025: Top 10 moves that could benefit every middle-class homebuyer

“However, even after the dollar cooled off from 110 to 107, the Nifty 50 and Sensex benchmarks failed to stage any meaningful recovery,” said Santosh Meena, Head of Research, Swastika Investmart Ltd.

During the week, however, a rebound in IT and FMCG helped limit the damage to the major benchmarks. The broader markets saw intensified selling pressure, with midcap and smallcap indices declining 2.5 per cent and four per cent respectively.

The Nifty IT index was the standout performer, gaining 3.5 per cent, helped by relatively better corporate earnings and optimism over increasing AI spending in the US. IT companies get a chunk of their revenue from the US.

Also Read: IDFC First Bank Q3 Results: Net profit slumps 53% to ₹339 crore, NII up 14% YoY; Asset quality stable

“The interplay of rising inflation, global price trends, and corporate performance will be crucial for market participants. Robust performances from these corporate heavyweights could catalyze positive investor sentiment, while any earnings misses may exacerbate market volatility,” said Puneet Singhania, Director at Master Trust Group.

The broader market remains under pressure, but the resilience of large-cap stocks is a positive sign. The Indian market has successfully navigated similar challenges in the past, from taper tantrums to geopolitical concerns,” said Vinod Nair, Head of Research, Geojit Financial Services. According to the expert, the current correction is driven by a combination of factors, including tapering, earnings slowdown, elevated valuations, and trade uncertainties.

“We believe the market is now in the final phase of consolidation. With the broad market has corrected by 14 per cent, the downside appears limited, supported by strong long-term economic fundamentals,” said Nair.

“If earnings growth reverts to the long-term average of 15 per cent in FY26, we can expect the market to move out of the negative trend. For long-term investors, this is an opportune time to remain patient and adopt an accumulation strategy,” he added.

This week, the primary market will witness subdued action as only a few initial public offerings (IPO) and important listings are slated across the mainboard and small and medium enterprises (SME) segments. The week will be critical from the domestic and technical point of view as investors will track domestic and global economic data, along with quarterly corporate earnings.

Here are the key triggers for stock markets in the coming week:

Budget 2025, Economic Survey

The upcoming week holds significant importance for the equity markets and the economy, with the Union Budget 2025 scheduled for February 1, 2025 (Saturday) and a special trading session on that day for real-time reactions to policy announcements. Finance Minister Nirmala Sitharaman will deliver the budget speech at 11 am.

According to Ajit Mishra – SVP, Research, Religare Broking Ltd, market participants hope for measures to boost the slowing economy and drive consumption while maintaining fiscal discipline. The stock market is looking for a meaningful trigger to shift sentiment positively. 

The government will present the Economic Survey on Friday, January 31, 2025. According to Vinod Nair of Geojit, expectations for the Union Budget 2025 remain subdued; however, the conclusion of this major event without any negative surprises could help alleviate the current market concerns.
 

Q3 Results, Auto sales

Several major companies, including Tata Steel, Bajaj Auto, Maruti, Tata Motors, ONGC, Cipla, and IndusInd Bank, are set to release earnings during the week, which could further influence market sentiment. According to Santosh Meena of Swastika Investmart, the ongoing Q3 earnings have been lacklustre so far, especially in the consumption and financial sectors. 

Also Read: NTPC Q3 Results: Net profit rises 3% to ₹4,711.4 crore, revenue up 5% YoY; dividend declared

Auto stocks will remain in focus as automakers will release their January sales figures on February 1, 2025. “Broadly, Q3 results are in line with the expectations but are not helping the market, which is following the sell-on news trend,” said Vinod Nair of Geojit.

2 new IPOs, 6 listings to hit D-Street

In the mainboard segment, Dr Agarwals Healthcare IPO will open for subscription this week. In the SME segment, only one IPO will open for bidding this week. Among listings, shares of Denta Water and Infra Solutions will debut on stock exchanges BSE and NSE on January 29. In the SME segment, shares of SMEs will debut on either BSE SME or NSE SME.

FII Activity

Foreign institutional investors (FIIs) have remained consistent net sellers, with outflows exceeding ₹69,000 crore in the cash segment this month. Domestically, FIIs offloaded ₹22,504 crore in the cash segment, while DIIs stepped in with strong net inflows of ₹17,577 crore, cushioning the impact of FII selling.

According to Dr V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, the FII selling through the exchanges has continued unabated. FIIs have been sellers on all but one day in January so far. This month, through January 24, FII selling in equity in the cash market was ₹66,602 crore. 

Also Read: FPIs extend selling streak to 12th straight session, January outflows top ₹50,000 crore

The sustained strengthening of the US dollar and the rise in US bond yields have been the principal factors driving the FII selling. So long as the dollar index remains above 108 and the 10-year US bond yield remains above 4.5 per cent the selling is likely to continue.

“Since the bulk of the FII assets under management are in financials, this segment has been bearing the brunt of FII selling. It has witnessed some buying in the wake of improved prospects for the sector and positive management commentary. Going forward, the IT segment is likely to witness buying,” said Dr V K Vijayakumar.

Global Cues (US Fed policy verdict)

The US Federal Reserve is expected to announce its next monetary policy verdicts in the coming week, which will influence the global interest rate trajectory in the next few weeks. The outcome of the US Federal Reserve’s policy meeting is scheduled for January 29, 2025.

The US Fed meeting and statements from the US President will influence market sentiment. Given the recent rise in inflation and the potential risks of further escalation, most expect no immediate action from the Fed. President Donald Trump’s call for rate cuts adds an element of uncertainty to the outcome. Analysts say while the FOMC maintains a hawkish stance, Trump’s push for rate cuts can add a positive undertone in the future.

The US Fed interest rate is expected to remain at 4.5 per cent, along with the US GDP Growth Rate for Q4, which is forecasted at 3.1 per cent. These releases will provide cues on economic growth and monetary policy. According to Vinod Nair of Geojit, the uncertainty around Trump’s economic policies and high valuations may impact the stock market in the short term, especially in EMs.

Also Read: US Fed to cut interest rates again? Donald Trump seeks lower rates by raising energy production; Here’s what experts say

On Friday, January 31, key US data will be released, including the Core PCE price index for December, which measures the price change in goods and services purchased by consumers, and trends in UK house prices. Movements in US bond yields and the dollar index will remain important to track. Signs of reversals in these two areas could drive positivity in global markets.

Crude oil prices

Global crude oil prices settled slightly higher in the previous session but logged a weekly decline, snapping a four-week winning streak, after US President Donald Trump announced sweeping plans to boost domestic crude oil production in the US while demanding that the Organisation of Petroleum Exporting Countries (OPEC) move to lower crude oil prices.

Brent crude futures settled up 21 cents, or 0.27 per cent, to $78.50 a barrel. US West Texas Intermediate crude (WTI) settled up four cents, or 0.05 per cent, to $74.66. Brent lost 2.8 per cent this week, while WTI declined 4.1 per cent in the last five days. Back home, crude oil futures last settled 0.86 per cent lower at ₹6,428 per barrel on the multi-commodity exchange (MCX).

Corporate Action

In the coming week, shares of Bharat Petroleum Corp Ltd (BPCL), Wipro, among, several others will trade ex-dividend. Senco Gold will undergo a stock split, while Indraprastha Gas Ltd (IGL) will declare a bonus issue. Check full list here

Technical View

From a technical perspective, the benchmarks remain vulnerable to further downside, with critical support in the 22,700-22,900 range for the Nifty. Any recovery will likely face strong resistance in the 23,450-23,650 zone. 

“A notable concern is the disconnect between the benchmarks and the broader market, as selective buying in heavyweight stocks has cushioned the decline, while broader market stocks continue to face sharp corrections, eroding portfolio values,” said Ajit Mishra of Religare Broking Ltd.

“Certain pockets are displaying resilience amid this correction. Given the upcoming events and heightened uncertainty, traders are advised to adopt a stock-specific approach and consider hedged positions,” added Mishra.

The Nifty index ended the week with a 0.48 per cent decline, marking its third consecutive weekly loss. It trades below critical support levels, including the horizontal zone and ascending trendline, as well as the 21 EMA, 55-week EMA, and 200-day EMA, confirming a downtrend. 

“The current technical structure supports a “sell on rise” strategy until the index exceeds 23,450. The market may target 22,850 and 22,600 on the downside. However, a breach above 24,450 could signal a potential recovery toward 23,750. Traders should remain cautious, as technical setups indicate a bearish bias persists,” said Puneet Singhania of Master Trust Group.

Bank Nifty closed lower for the third consecutive week, trading below its horizontal support band and key moving averages, including the 21 EMA and 55-week EMA, signalling a bearish trend. Strong selling pressure persists near the 48,900 – 49,000 resistance zone, with a breakout above this level potentially driving the index toward 49,700. 

“On the downside, support is placed at 47,900, and a breach below this level could intensify selling pressure, targeting 47,200 as the next level. The technical setup indicates a “sell on rise” strategy remains favourable until the index sustains above 49,000. Traders should exercise caution as bearish momentum dominates the market,” added Singhania.

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts, consider individual risk tolerance, and conduct thorough research before making investment decisions, as market conditions can change rapidly, and individual circumstances may vary.