The Indian stock markets experienced volatility throughout the week but ultimately closed with significant gains. The announcement of the India-US trade deal led to a strong recovery, offsetting initial concerns over the increase in securities transaction tax on derivatives in Budget 2026–27. Bullish momentum returned towards the week’s end, driven by positive global and domestic factors.
Market sentiment improved further after the RBI decided to maintain policy rates and revised its GDP growth estimates upwards. The Nifty and Sensex indices concluded at 25,693.70 and 83,580.40, respectively, with broader indices also showing advancements. Market experts noted that equities responded positively to the reduction in tariffs on Indian goods by the US and the record bilateral trade between India and China reaching $155 billion in 2025.
The RBI’s decision to keep the repo rate unchanged at 5.25% and the optimistic projection of FY26 inflation at 2.1% contributed to the positive market outlook. January saw a 6.2% year-on-year rise in GST collections, indicating stable consumption and import activities. Sector-wise, domestic cyclicals and rate-sensitive segments like realty, energy, and auto performed well, driven by expectations of sustained domestic demand and improving macro visibility.
Market analysts observed that while most sectors showed positive performance, IT was a notable underperformer for the week. Looking ahead, market watchers anticipate Nifty to consolidate with a positive bias as long as it remains above the 25,400 level. Investors are keenly awaiting the release of January’s consumer price inflation data, which will be based on the revised base year of 2024.
