Indian equity markets open today for a rare special trading session ahead of the Union Budget for the financial year 2026-27 (FY27), to be presented by Union Finance Minister Nirmala Sitharaman at 11 AM in the Lok Sabha. The mood, at least in early indicators, appears robust.
The BSE Sensex rang the opening bell near 82,200, slipping 34 points, and the NSE Nifty50 breached 25,300, taking a hit of close to 50 points, as of 9:15 AM.
In the pre-open session, the Sensex climbed a little over 175 points and neared 82,450, and the Nifty crossed 25,350, around 9:04 AM.
With investors bracing for policy signals rather than surprises, volatility is expected to pick up once the Budget speech begins and fiscal numbers hit the screens.
This special session serves as the market’s first real-time verdict on the government’s economic blueprint for FY27, and expectations are unusually nuanced this year.
Economic Survey Sets the Tone Before Budget Day
Ahead of today’s Budget presentation, the Economic Survey 2026-27 was tabled in Parliament on January 29. The Survey projected India’s GDP growth at 6.8-7.2 per cent in FY27, citing macroeconomic stability. It also placed swadeshi at the centre of a broader strategic shift in policy thinking.
Notably, the Survey upgraded India’s medium-term potential growth rate to 7 per cent from 6.5 per cent estimated in the FY23 Economic Survey, reflecting the cumulative impact of structural reforms implemented over recent years.
For markets, this provides a stable macro backdrop. However, analysts expect the government to balance reform ambitions with fiscal prudence, particularly as tax cuts are estimated to trim revenues by about Rs 1.5 trillion ($16 billion) in the current fiscal year.
Friday Recap: Markets End January on a Weak Note
Going into the Budget session, domestic equities had already shown signs of fatigue. On Friday, the Sensex snapped a three-day winning streak, falling 296.59 points, or 0.36 per cent, to close at 82,269.78. The Nifty 50 declined 98.25 points, or 0.39 per cent, ending at 25,320.65.
On a monthly basis, the Nifty slipped 3.1 per cent, its worst monthly performance since February 2025, when it had dropped more than 5.8 per cent. The pullback reflects a combination of global headwinds, valuation concerns and cautious positioning ahead of the Budget.
Today’s special session could determine whether January’s softness extends into February or gives way to renewed optimism.
Global Cues: Hawkish Signals and Inflation Concerns
Overseas markets offered limited comfort heading into India’s Budget Day. Wall Street’s major indices closed lower on Friday after US President Donald Trump nominated former Federal Reserve Governor Kevin Warsh, widely seen as hawkish, to succeed Federal Reserve Chair Jerome Powell.
The S&P 500 declined 0.43 per cent, the Nasdaq Composite dropped 0.94 per cent, and the Dow Jones Industrial Average fell 0.36 per cent. Investors also digested corporate earnings and a higher-than-expected inflation reading.
In Asia, markets ended mostly lower. China’s Shanghai Composite fell 0.96 per cent, Australia’s S&P/ASX 200 declined 0.65 per cent, and Japan’s Nikkei 225 eased 0.09 per cent. South Korea’s KOSPI managed a marginal gain of 0.06 per cent.
These mixed global signals reinforce the likelihood of a cautious domestic opening.
Commodity Watch: Oil Prices Ease Slightly
Oil prices edged lower in early trade on Sunday. WTI crude was at $65.21 per barrel, down 0.32 per cent, while Brent crude slipped 0.39 per cent to $69.31 per barrel.
Lower crude prices could offer mild relief on the inflation and fiscal fronts, especially as India remains a major importer of energy.
What Corporate India Wants: Administration Over Legislation
Interestingly, expectations from this Budget are less about sweeping tax reforms and more about improving administration.
Dinesh Kanabar, Chairman & CEO, Dhruva Advisors India Pvt Ltd, said the Budget comes at a unique moment in India’s tax history. With the new Income Tax Act, 2025, scheduled to come into force from 1 April 2026, substantive amendments are unlikely.
“The moment calls for administrative reform over tax policy changes, and that is where the real opportunity lies,” Kanabar said.
He outlined four broad areas of expectation: simplifying compliance (especially rationalising TDS rates), incentivising high-technology manufacturing and R&D, reducing the mounting burden of tax litigation, and improving tax administration culture.
On litigation, he noted that at the current pace of disposal, it would take five to six years to clear the backlog, underscoring the need for dispute resolution schemes.
Middle-Class Focus: Relief, Simplicity and Cash Flow
For individual taxpayers, expectations revolve around practical relief rather than headline announcements.
Pyush Lohia, Director of Lohia Worldspace, said higher disposable income remains a priority for the salaried middle class.
“Raising the basic exemption limit, enhancing the standard deduction and rationalising tax slabs can immediately ease pressure on household finances,” Lohia said.
He also emphasised simplification, faster refunds and rationalised TDS provisions to improve monthly cash flow.
According to him, when families retain more of their earnings, consumption improves across housing, services and discretionary segments, creating a multiplier effect without excessive fiscal stimulus.
Real Estate’s Wishlist: Liquidity and Affordable Housing Boost
The property sector, which contributes around 7 per cent to India’s GDP and supports over 200 allied industries, is also closely watching today’s announcements.
Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd, said the sector is seeking sustained policy support to improve affordability and ease liquidity constraints.
Granting industry status, he said, would reduce borrowing costs and improve transparency. Aggarwal also called for the extension and reintroduction of the Credit Linked Subsidy Scheme (CLSS) and expanding the definition of affordable housing to include homes priced up to ₹1 crore.
According to industry reports cited by Aggarwal, real estate has the potential to contribute up to 15 per cent to India’s GDP by 2047.
The Big Question: Reform Momentum vs Fiscal Discipline
As markets open for this special session, the central tension remains clear: can the government deliver growth-supportive measures while keeping spending in check amid revenue pressures?
The Economic Survey projects stability. Corporate India seeks administrative ease. The middle class wants relief. Real estate hopes for liquidity support.
By the closing bell today, investors will have begun pricing in their verdict.
