Mumbai: Indian equity markets were set for a positive start in a rare Sunday trading session on the eve of the annual Union Budget 2026–27, as investors sought clear policy direction on government spending, tax structures, and support for key sectors of the economy. The optimism reflected hopes that the budget will strike a balance between stimulating growth and maintaining fiscal discipline.
Futures on the Nifty 50 benchmark, traded on the GIFT Nifty platform, indicated a higher opening for the index compared to its last closing level of 25,320.65, signaling that traders were positioning for potential upside ahead of Finance Minister Nirmala Sitharaman’s budget speech scheduled for 11 a.m. IST today.
Debt and foreign exchange markets remained closed on Sunday in observance of the budget presentation, a departure from normal weekend operations, but equity and commodity markets were active under regular trading hours.
Domestic equities had delivered an approximate 7.8% gain since the previous budget announcement, yet this performance lagged regional peers amid sustained foreign fund outflows and muted corporate profit growth. A challenging January saw major indices including the Nifty and Sensex logging their weakest monthly returns in nearly a year, triggered by trade tensions, weak earnings, and broader global uncertainties.
Recent policy actions, including GST rate cuts, interest rate reductions, and monetary easing measures, have, however, bolstered expectations of an improved domestic demand cycle a theme many analysts believe will be reinforced in the budget.
The government’s own Economic Survey projected India’s gross domestic product growth for fiscal year 2027 at 6.8%–7.2%, slightly lower than the current year’s forecast of around 7.4%, underscoring the need for targeted fiscal measures to sustain momentum. Analysts widely expect the budget to prioritize capital expenditure, infrastructure development, and relief for export-oriented industries, particularly those affected by recent U.S. tariffs.
Investor focus extended to strategic industries such as defense, railways, infrastructure, and rural sectors, which could be beneficiaries of increased government outlays or incentives. The defense sector, in particular, has shown resilience with significant gains in recent months, driven by expectations of enhanced spending and manufacturing encouragement.
Despite cautious market optimism, risks remain. Elevated volatility levels signaled investor unease ahead of policy announcements, and geopolitical headwinds including trade uncertainties continue to influence capital flows and sentiment. Some market participants caution that unless the budget delivers concrete measures that go beyond broad fiscal support, volatility could persist even after the announcement.
As Indian markets navigate this pivotal policy moment, all eyes are on the Finance Ministry’s fiscal roadmap and the immediate market reaction once the budget details are made public later today.