The Indian stock market is bracing for a whirlwind of activity in the next two weeks, with both domestic and global events poised to dictate its course. From crucial economic announcements to major political developments, investors are on the edge of their seats, anticipating how these events will shape market sentiment. Will the Union Budget provide the much-needed boost? How will global cues like Donald Trump’s return to power impact India’s growth story? With so much at stake, these next 15 days could be a make-or-break period for traders and investors alike. Here are the five key factors likely to influence the market’s direction.
Donald Trump Taking Charge of the U.S. Government
Today on January 20, 2025, President Elect Donald Trump is going to take the charge of US Government. His leadership style, known for its protectionist policies and trade-related decisions, may create ripples in the global markets, including India. The Indian IT and pharmaceutical sectors, which are heavily reliant on the U.S. market, may experience fluctuations based on Trump’s stance on outsourcing, immigration, and trade. Investors will closely watch his initial policy announcements for signals on the future of Indo-U.S. economic relations.
Union Budget on February 1
The Union Budget for FY 2025-26, set to be announced on February 1, is a pivotal event for the markets. Investors will closely monitor Finance Minister Nirmala Sitharaman’s proposals, especially regarding fiscal deficit targets, infrastructure spending, and tax reforms.
Key sectors like infrastructure, banking, manufacturing, and renewable energy could see major policy support, which may lead to sector-specific rallies. Market participants will also scrutinize announcements related to personal income tax slabs, disinvestment targets, and incentives for foreign direct investments. A growth-oriented budget could inject optimism, while higher taxes or excessive fiscal tightening might dampen sentiment.
RBI’s Monetary Policy on February 7
The RBI’s Monetary Policy Committee (MPC) meeting on February 7 will be another significant event. With inflation currently within the RBI’s target range, market participants anticipate a possible pause on interest rate hikes.
However, factors like global economic uncertainty and the Federal Reserve’s stance on monetary tightening will influence the RBI’s decision. A dovish policy could benefit rate-sensitive sectors like real estate, automobiles, and banking, whereas a hawkish tone might lead to profit-booking in these sectors.
Delhi Election Results on February 8
The Delhi Assembly election results, scheduled to be announced on February 8, will provide insights into political dynamics ahead of the 2024 general elections. While the Delhi elections may not have a direct impact on the national policy framework, they serve as a barometer for public sentiment. A strong performance by the ruling Bhartiya Janata Party (BJP) may bolster investor confidence in the continuity of pro-reform policies. Conversely, a weaker-than-expected performance could lead to temporary volatility.
Marksmen View: A Crucial Period for Indian Markets
The Indian stock market is entering a high-stakes fortnight, with domestic and global events poised to drive volatility. The Union Budget on February 1 will be pivotal, potentially spurring growth through reforms and sectoral boosts. The RBI’s monetary policy on February 7 could shape rate-sensitive sectors, while Delhi election results on February 8 might indicate political sentiment ahead of 2024. Globally, Donald Trump’s return to power raises concerns for IT and pharma sectors, while crude oil prices remain a wildcard. At Marksmen, we believe cautious optimism and diversified portfolios will help investors capitalize on opportunities while mitigating risks.
