The Indian stock markets remained volatile during the week but ended with healthy gains, after the announcement of the India-US trade deal sparked a strong recovery, helping domestic indices absorb the early weakness following the increase in securities transaction tax (STT) on derivatives in Budget 2026–27, analysts said on Saturday.
Bullish momentum resurfaced towards the end of the week with supportive global and domestic triggers outweighing initial Budget-related concerns. Sentiment improved further after the RBI kept policy rates unchanged and revised its GDP growth estimates upward. As a result, the benchmark indices — Nifty and Sensex — closed at 25,693.70 and 83,580.40, respectively. Broader indices also advanced, reflecting improved risk appetite, said Ajit Mishra – SVP, Research, Religare Broking Ltd.
Market cues were largely positive on both domestic and global fronts. Equities rebounded sharply after the US announced a reduction in tariffs on Indian goods to 18 per cent following high-level discussions. Meanwhile, India–China trade data indicated that bilateral trade reached a record $155 billion in 2025.
On the monetary policy front, the RBI maintained status quo, keeping the repo rate unchanged at 5.25 per cent, and projected FY26 inflation at 2.1 per cent, citing a constructive outlook for both inflation and growth, said Mishra.
Macro indicators remained supportive through the week. January GST collections rose 6.2 per cent year-on-year to over Rs 1.93 lakh crore, indicating steady consumption and import activity. Sectoral performance was skewed toward domestic cyclicals and rate-sensitive segments. Realty, energy, and auto emerged as top gainers, supported by expectations of sustained domestic demand, improving macro visibility, and risk-on sentiment following tariff relief.
In contrast, IT was the only notable laggard, with the index declining sharply on a weekly basis and underperforming the broader market. According to market watchers, Nifty is likely to consolidate with a positive bias as long as it holds above the 25,400 level.
“A breakdown below this mark could lead to a gap-fill move toward the 25,100 zone. On the upside, a decisive breakout above 26,000 may trigger the next leg of the rally toward the record high area around 26,400,” they noted. Investors will now watch the release of January consumer price inflation data, which will be compiled using a revised base year of 2024.
