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Budget 2026: Market Tumbles Amid Pre-Budget Jitters
22 Jan
Summary
- Indian stock indices have lost over 3% in January pre-Budget.
- Midcap and smallcap indices show steeper declines of 4.2% and 5.8%.
- Analysts suggest defensive stocks like FMCG and banking for safety.
The Indian stock market is navigating a turbulent period leading up to the Union Budget 2026. Benchmark indices like the BSE Sensex and NSE Nifty 50 have each declined over 3% in January. The downturn is more pronounced in the midcap and smallcap indices, which have fallen 4.2% and 5.8%, respectively.
Geopolitical tensions and concerns over India Inc.'s earnings are contributing to investor apprehension. Analysts suggest a strategy of defensive rotation combined with long-term investments. They are particularly bullish on the banking sector, favoring large lenders, alongside select public sector undertakings (PSUs) and manufacturing companies.
Within banking, private lenders such as HDFC Bank, Kotak Mahindra Bank, and Federal Bank are seen as offering attractive entry points due to moderated valuations. For PSUs, stocks like ONGC, BEL, and Hindustan Copper are recommended for their strategic alignment with energy security and defense indigenization. The FMCG sector is also highlighted for its defensive qualities, offering earnings visibility and stability.
