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Informist, Wednesday, Jan. 28, 2026

By Eshitva Prakash

MUMBAI – Benchmark indices are expected to be range-bound Thursday as global cues are likely to be muted, with the US Federal Reserve expected to keep its interest rates unchanged in its policy meeting. Analysts do not expect major policy decisions by Finance Minister Nirmala Sitharaman in the Union Budget for 2026-27 (Apr-Mar), but they expect select public sector enterprises to witness a pre-budget rally.

The US Fed is widely expected to pause its interest rate-cutting cycle as a steadier jobs market restores a degree of consensus at the central bank after months of growing division, Bloomberg said in a report. Several Fed officials have been signalling that rates are now in the right place, that is, 3.50-3.75%.

While analysts are enthusiastic about the finalisation of the free trade agreement between India and the European Union, they advise caution to investors, saying that the benefits of this deal are expected to come in from the next financial year.

The Nifty 50's support is placed at 25150 points, and it may face resistance around 25450 points, Osho Krishan, chief manager of technical and derivatives research at Angel One, said. "Equity market is not reacting to this (India-EU deal) because this deal will take a time to happen, it will not happen overnight," Vinit Bolinjkar, head of research at Ventura Securities, said. However, he expects the index to have bottomed out and expects the recent trade agreements, including that with the EU, to be positive.

The India-EU trade deal will eventually aid small and medium enterprises and help improve credit growth for banks, Bolinjkar said. The India–EU agreement gives a decisive boost to labour-intensive sectors such as textiles, apparel, leather, footwear, marine products, gems and jewellery, handicrafts, and engineering goods, Deutsche Bank said in a report.

India has seen consistent market share losses in major EU textile import categories over 2018-2024 to competitors that enjoy duty-free imports, Elara Securities said. The brokerage expects the India-EU agreement to provide a "structural tailwind" for the Indian textile sector. The free trade agreement directly addresses India's competitive disadvantage by eliminating the 10-12% tariff gap that has enabled Bangladesh and Pakistan to gain share at India's expense, the brokerage said.

On the domestic policy front, investors do not expect large measures from the Budget for FY27 as the finance minister grapples to address multiple variables, Motilal Oswal Financial Services said in a research report. The brokerage expects the Indian government to continue with its fiscal consolidation approach. However, given that overall consumption is yet to fully recover and sentiment is improving unevenly, a scenario of pragmatic, minor policies is not completely ruled out, the brokerage said. The equity market will likely support a policy aimed at improving productive capital expenditure and consumption, rather than transfer payments or administrative expenses, Motilal Oswal said.

The government will have to balance demand revival measures with infrastructure development and growth may be impacted if capital expenditure allocation falls below 3% of GDP, JM Financial Institutional Securities said. The brokerage expects the budget announcements to be inward-looking and focus on demand, supply chain self-reliance, and macro stability. The brokerage expects a shortfall in tax revenue collections of INR 2.0 trillion to INR 2.2 trillion, which will exert pressure in meeting the fiscal deficit target of 4.4% of GDP in FY26.

Larsen & Toubro, SBI Cards and Payment Services, The Phoenix Mills, Cochin Shipyard, Five-Star Business, Star Health, and TVS Holdings announced their earnings after market hours and their shares may react Thursday. Investors are waiting for the earnings of ITC which are scheduled Thursday. The company's December quarter earnings are expected to grow steadily, led by resilient cigarette sales volume, sustained momentum in the fast-moving consumer goods business, and a strong performance in the agri-business segment, according to brokerages tracking the company.  End

Edited by Ashish Shirke

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