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Markets Dip Ahead of Budget: IT, Metals Drag Down Sentiment
31 Jan
Summary
- Indian markets declined Friday, with IT and metal stocks weighing on sentiment.
- Global uncertainties and potential Fed leadership changes add to market volatility.
- Investors await Union Budget cues to determine the market's next decisive move.
Indian equity markets closed lower on Friday, with benchmark indices Sensex and Nifty retracting from their recent peaks as investors adopted a defensive stance in anticipation of the Union Budget. The Sensex saw a decline of 296.59 points, ending at 82,269.78, while the Nifty fell by 98 points to close at 25,320.65.
Market volatility was heightened by weakness in IT and metal stocks, according to Vinod Nair, Head of Research at Geojit Investments. The IT sector's underperformance was attributed to global growth concerns and rising U.S. bond yields. Concurrently, gold and silver prices dropped amidst a strengthening dollar, while sustained FII selling and rupee depreciation added to the cautious market sentiment.
Analysts are closely watching the upcoming Union Budget for signals on growth support and fiscal discipline, especially amidst increasing geopolitical risks and global trade pressures. Globally, while a potential U.S. government shutdown was averted, markets remain attentive to the appointment of a new Federal Reserve Chair. A more hawkish monetary policy could lead to tighter liquidity, potentially impacting emerging markets like India.
