Markets end lower ahead of Union Budget amid metal stock sell-off

Benchmark indices fell on Friday as metal stocks slumped sharply, while investors stayed cautious ahead of the Union Budget and amid sustained foreign fund outflows

Benchmark indices declined on Friday as a sharp selloff in metal stocks weighed on investor sentiment, already dampened by heavy foreign portfolio investor (FPI) selling, concerns over corporate profitability, and the lack of progress on the Indo-US trade deal.

 

Investors also remained cautious ahead of the Union Budget scheduled for Sunday, where any changes to the capital market tax structure could lead to sharp reaction from investors.

 

The Sensex ended the session at 82,270, down 297 points or 0.4 per cent, while the Nifty closed at 25,321, shedding 98 points or 0.4 per cent. For the month, the Sensex declined 3.5 per cent and the Nifty fell 3.1 per cent, marking their steepest monthly decline since February 2025.

 

 

Total market capitalisation stood at ₹460 trillion, down by ₹8 trillion during the week.

 

Metal stocks plunged sharply, with the Nifty Metal index falling 5.2 per cent —  logging its biggest single-day fall since April 7, 2025 — tracking a broader overnight selloff in global metals markets.

 

Gold prices declined 4.6 per cent to $5,127 per ounce, while silver fell 10.7 per cent to $103.4 per ounce.

 

The selloff came amid a rebound in the US dollar, following media reports that the Trump administration is set to nominate the next Federal Reserve chief.

 

“There was a steep price correction in gold, silver and copper overnight, and the same was reflected in stock prices. After a sharp rise in metal prices, profit taking was due, and the viability of using these commodities — especially silver — at elevated prices for industrial production has come down. There could be more correction in the offing, followed by consolidation. Metal prices also have an inverse correlation with the dollar index, which will have a bearing on the likely stance of the new US Federal Reserve chief on interest rates,” said Sunny Agrawal, head of fundamental research at SBI Caps Securities.

 

On Friday, foreign portfolio investors (FPIs) were net buyers worth ₹2,251 crore, while domestic institutional investors were net sellers to the extent of ₹601 crore.

 

FPIs have been net sellers to the tune of ₹31,000 crore so far this month, the highest since August 2025.

 

Persistent FPI selling pushed the rupee to a fresh record closing low of 91.99 against the dollar. The dollar index, meanwhile, has declined 2.4 per cent in January.

 

Going ahead, investors will closely track the Union Budget for fresh cues. Markets will remain open on Sunday for the Budget.

 

“Our view on the Nifty remains unchanged. Sustenance above the 25,350 level could result in a further rebound towards the 25,600 zone, while a decisive break below the long-term moving average — the 200-day DEMA around 25,150 — may derail the recovery and drag the index towards the 24,750-24,900 zone. With all eyes on the Union Budget, we expect heightened volatility during the special trading session on Sunday and suggest preferring a hedged approach,” said Ajit Mishra, SVP-Research, Religare Broking.

 

Market breadth was positive, with 2,380 stocks advancing and 1,831 declining.