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### Budget Day Opens Amidst Volatility
Indian stock markets are observing a special trading session on Sunday, February 1, 2026, to facilitate the presentation of the Union Budget 2026-27. Finance Minister Nirmala Sitharaman is set to deliver her ninth budget, outlining the nation's fiscal roadmap. This session follows a subdued trading day on Friday, January 30, 2026, where the NSE Nifty 50 closed down 0.39% at 25,320.65 and the BSE Sensex fell 0.36% to 82,269.78. Market sentiment remained cautious, driven by pre-budget anticipation and a mixed global outlook.
### Commodity Prices and Currency Dynamics Under Pressure
Commodity markets experienced significant price swings leading up to the budget. Gold prices saw a sharp reversal, falling approximately 12% from recent peaks to around Rs 1,49,590 per 10 grams for 24-carat gold. Silver prices also dropped steeply, falling below $100 per ounce globally and approximately 30% in India, settling near Rs 2,92,280 per kilogram. This correction in precious metals was partly attributed to a stronger U.S. dollar. The US Dollar Index (DXY) saw an uptick, trading at 97.15, contributing to the Indian Rupee's slight depreciation to 91.98 against the dollar on Friday. Crude oil prices presented a mixed picture; WTI futures traded around $65.74 and Brent crude at $69.82 on Friday morning, following a volatile previous session driven by geopolitical tensions concerning Iran.
### Institutional Flows Show a Divergence
Provisional data for Friday, January 30, 2026, indicated a notable shift in institutional investment patterns. Foreign Institutional Investors (FIIs) emerged as net buyers, investing Rs 2,251.37 crore, while Domestic Institutional Investors (DIIs) were net sellers to the tune of Rs 601.03 crore. This contrasts with general trends observed in January 2026, where Foreign Portfolio Investors (FPIs) were net sellers, with equity outflows reaching approximately $2.11 billion in the first fortnight of the month. The sustained foreign selling pressure in equities earlier in the month highlights ongoing caution among global investors regarding Indian markets, influenced by global economic uncertainties and capital shifts.
### Sectoral Performance and Group Movements
Friday's trading session saw varied sectoral performance. The Aquaculture sector registered notable gains, while sectors like Metals – Non-Ferrous faced declines. Earlier in the week, on January 29, Nifty Metal stocks had fallen by 5.21% and Nifty IT by 1.03%. Among business groups, the Vedanta Group experienced pressure, with Hindustan Zinc shares dropping significantly. Specifically, Tata Steel, a Vedanta Group company, tanked 4.57% on Friday. Conversely, the Jaipuria Group saw a market capitalization increase of 4.13%.
### Macroeconomic Context and Budget Expectations
The Union Budget presentation occurs against a backdrop of projected economic growth. The Economic Survey 2025-26 indicated a GDP growth forecast of 6.8%–7.2% for FY27, underscoring India's position as a significant global growth engine amidst global economic uncertainties. Historically, market reactions to budget days have been mixed, with periods of sharp rallies in response to growth-oriented policies and infrastructure spending, as seen in 2017 and 2021, alongside instances of decline due to fiscal concerns or unexpected tax changes. Investors are focused on budgetary announcements concerning fiscal discipline, capital expenditure, tax reforms, and sector-specific incentives that could shape the economic trajectory for the coming financial year.