Markets likely to make negative start ahead of Union Budget 2026

Indian equity markets are likely to make negative start amid weak global cues and ahead of the Union Budget 2026. Besides, investors are likely to remain on side-line after U.S. President Donald Trump said he would announce his pick for the next Federal Reserve chair.

Some of the key factors to be watched: 

India should prioritise trade opportunities over tariffs: World Bank Group President Ajay Banga said that India should think less about tariffs and focus more on opportunities, amid concerns over global trade due to geopolitical tensions.

India's potential growth rate can jump to 7.5% in next few years: Chief Economic Advisor V Anantha Nageswaran said that India's potential growth rate can jump to 7.5 per cent in the next few years if the country puts emphasis on bolstering manufacturing, exports and process reforms. 

India gains trade edge in Turkiye via EU FTA: Think tank GTRI said that India has received a small unintended bonus from its free trade agreement with the European Union (EU), as Indian goods can enter Turkiye with duty concessions, while Turkish products cannot use the pact to export to India. 

Coking coal declared critical mineral by govt: The government has notified coking coal as a critical and strategic mineral, a move aimed at reducing dependence on imports and strengthening the domestic steel supply chain.

Sugar sector’s stocks will be in focus: Industry body AISTA said that India's sugar production is estimated to rise 13 per cent to 29.6 million tonnes in the 2025-26 season ending September, excluding diversion for ethanol, but exports will remain below the permitted quota at 8 lakh tonnes.

On the global front: US markets ended mostly in red on Thursday as major averages have all moved to the downside, with the tech-heavy Nasdaq showing a particularly steep drop. Asian markets are trading mostly in red on Friday as industrial production in Japan was down a seasonally adjusted 0.1 percent on month in December. 

Back home, Indian equity benchmarks pared initial losses and closed higher for the third consecutive session on Thursday, helped by a rally in blue-chip Tata Steel and the Economic Survey projecting the GDP growth of 6.8-7.2 per cent for the next fiscal. A rally in global markets and fresh foreign fund inflows helped key indices recover from lows. Finally, the BSE Sensex rose 221.69 points or 0.27% to 82,566.37 and the CNX Nifty was up by 76.15 points or 0.30% to 25,418.90. 

Some of the important factors in trade: 

India’s industrial output growth surges to 7.8% in December: The government data showed India's industrial production growth accelerated to over a two-year high of 7.8 per cent in December 2025, driven by strong performances in mining, manufacturing and electricity.

Negotiations between India, Chile on proposed FTA close to completion: The negotiations between India and the South American nation Chile, on the proposed comprehensive free trade agreement (FTA) are close to completion. 

India, US trade deal at very advanced stage: India and the US have made very significant progress in their negotiations for a trade deal, with New Delhi maintaining steady momentum in talks with Washington for a positive outcome even during the final stages of concluding its free trade pact with the European Union.