The S&P BSE Sensex and NSE Nifty 50 indexes ended the week lower ahead of the presentation of the Union Budget for financial year 2020-21 by Finance Minister Nirmala Sitharaman on February 1. The S&P BSE Sensex declined 0.8 per cent and the Nifty 50 index dropped 0.84 per cent for the week ended January 24. This week's trading was marred with high volatility as the benchmarks fell for first three days of the week and gained in the last two days.
In the first three trading sessions of the week, selloff in the markets deepened wherein the Sensex fell 830 points or 2 per cent and the Nifty plunged 245 points or 1.98 per cent as investors were spooked by a string of weak earnings reports by top corporates.
Meanwhile, analysts say that the markets are likely to remain volatile until the government presents the Union Budget on February 1, when it may also unveil more measures to lift growth.
The market has lots of expectations from this Budget amid an economic slowdown and it is being said that this Budget could be different because PM Modi himself was aggressively involved in drafting the Budget. There is a need for steps to get back confidence in the Indian economy where after a corporate tax cut, finance minister may announce cut in personal income tax which will help to boost consumption in the economy, Santosh Meena, senior analyst at TradingBells said in an email statement.
"Rural, housing, and infra sector will be key focus areas in this budget while if we talk about the market then tweak in long=-term capital gains tax (LTCG) is largely expected and even dividend distribution tax (DDT) could be rationalized," Mr Meena said.
Apart Union budget, global cues and third quarter corporate results will also have impact on the markets. Coronavirus is a key worry for the global markets because if the situation becomes worse from here then it could result in short term slowdown in the global economy, added Mr Meena.
In terms of earnings, ICICI Bank will react on its Q3 results on Monday whereas HDFC Ltd, Indigo, Maruti, Pidilite Industries, Jubilant foodworks, Godrej consumer products, Escorts, Bajaj finance, Bajaj Auto, Dabur, LIC Housing Finance and Tata Motors will be the key earnings in focus for the next week, he added.