Indian Stock Market Falls Ahead of Union Budget 2026 as Sensex, Nifty Slip

KEY TAKEAWAYS:

Sensex dropped 269 points while Nifty slipped 98 points ahead of the Union Budget 2026 on February 1.
Metal stocks crashed sharply, pushing the Nifty Metal index down more than 5 per cent.
Rupee strengthened slightly as crude oil prices eased in global markets.

Mumbai: The Indian stock market falls ahead of Union Budget 2026, with benchmark indices closing in the red on Friday due to profit booking and sharp weakness in metal stocks.

Investors remained cautious before the crucial Budget announcement scheduled for February 1, which is expected to provide key signals on growth priorities and fiscal discipline.

At the closing bell, the Sensex declined by 269 points, or 0.36 per cent, settling at 82,269. The Nifty also slipped 98 points, or 0.39 per cent, ending at 25,320.

Broader Markets Show Mixed Performance Despite Benchmark Losses

While frontline indices weakened, broader markets displayed divergence.

The Nifty Midcap 100 edged down only 0.17 per cent, while the NSE Smallcap 100 gained 0.32 per cent, indicating selective buying outside large caps.

Metal Stocks Lead Losses Across Sectoral Indices

Sectoral indices traded mixed, but metals saw the steepest fall.

The Nifty Metal index plunged 5.34 per cent, reflecting heavy selling pressure in commodity-linked stocks. IT shares also lagged, with the Nifty IT index down 1.02 per cent.

Meanwhile, defensive sectors outperformed. Nifty Media surged 2.07 per cent, consumer durables added 1.09 per cent, and FMCG rose 1.41 per cent.

IT Sector Under Pressure Amid Global Growth Worries

Analysts noted that IT stocks remained under strain due to global economic uncertainty and rising US bond yields.

Higher yields typically tighten liquidity conditions and weigh on export-heavy sectors like technology.

Bank Nifty Shows Improving Technical Structure

Market experts highlighted a stronger trend in the banking space.

Bank Nifty has reclaimed its breakout zone and is sustaining above its short-term 20-day and 50-day moving averages, signaling improving momentum.

Support is placed near 59,000, while resistance is expected around the 60,400 level.

Rupee Gains as Crude Prices Ease

The Indian rupee recovered from its lowest levels and strengthened by 15 paise to trade at 91.92 against the US dollar.

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The rise was supported by softer crude oil prices in the international market.

Budget 2026 Closely Watched Amid Global Uncertainty

The Union Budget comes at a time of heightened geopolitical risks, tariff pressures, and persistent foreign institutional investor (FII) selling.

Investors are looking for measures that balance fiscal prudence with economic growth support. But Indian stock market falls ahead of Union Budget 2026 today.

Markets are also monitoring the potential appointment of a new US Federal Reserve Chair, as any hawkish shift could tighten liquidity and pressure emerging markets further.