Markets to focus on Budget, US Fed policy in eventful week, say analysts

Interim budget, the US Federal policy decision and quarterly earnings will be the major drivers for stock markets which may also see some consolidation this week, say analysts.

Besides, investors would also focus on the trading activity of foreign investors and global trends for further cues.

From the macroeconomic front, the PMI (Purchasing Managers' Index) data for the manufacturing sector is scheduled to be announced on Thursday.

Finance Minister Nirmala Sitharaman will present the interim budget for 2024-25 on February 1 (Thursday). The Federal Open Market Committee meeting will be held on January 30 and 31.

"Market is likely to consolidate further ahead of the US Fed interest rate decision where the Fed is expected to maintain status quo and give some hint with regards to rate cut timeline. Apart from this, BoE (Bank of England) monetary policy is also due coupled with a few key economic data releases which might keep markets volatile.

"Further many heavyweights would be releasing their earnings this week, thus stock-specific action would continue despite market consolidation," said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

Adani Green Energy, Bajaj Finance, Bajaj Finserv, Maruti Suzuki India, Titan and InterGlobe Aviation will announce their quarterly earnings this week.

This week is crucial, aligned with the key budget event, which typically sets the market direction, Rajesh Bhosale, Technical Analyst at Angel One, said.

"Going forward, global market factors like the policy rate decisions of major countries will affect the markets, and markets are likely to witness stock-specific actions during the ongoing earnings season," said Vinod Nair, Head of Research, Geojit Financial Services.

Last week, the BSE benchmark fell by 982.56 points or 1.37 per cent, and the Nifty declined 269.8 points or 1.24 per cent.

"With the budget being interim in nature, no big-bang announcements are expected. Rather, we expect the budget to focus more on retaining the roadmap of growth with some flavour of populism," as per a report by Axis Securities.

"Budget, earnings, and the US Fed policy will keep the market on its toes," said Santosh Meena, Head of Research, Swastika Investmart Ltd.

This week is poised to be pivotal, marked by a series of significant events, with the budget taking the centre stage, Meena said.

He further said that beyond domestic factors, the market will be influenced by the global landscape, including geopolitical developments and movements in the US bond yields, the dollar index, and crude oil prices.