With Trump tariff threat looming large on equity markets worldwide, Sensex and Nifty traded higher for the fifth straight session on Budget day, when investors would be closely tracking Finance Minister Nirmala Sitharaman's plan to boost domestic consumption by cutting income tax rates.

The BSE Sensex was up 300.62 points, or 0.39%, at 77,801.19, while the Nifty50 gained 91.60 points, or 0.39%, to 23,600.00 around 11:25 am. Both indices opened flat before edging higher.

Sitharaman will begin presenting the Budget in Parliament at 11 a.m. IST.

Since the post-election interim Budget on July 23, the Nifty has lost 4%, while mid-cap and small-cap indices have declined 4.6% and 8.1%, respectively, amid slowing economic growth that has impacted corporate earnings and dampened foreign investor sentiment.

India’s GDP growth for FY26 is projected at 6.3%-6.8%, according to the annual Economic Survey, aligning with the 6.4% estimate for the current fiscal year.

While the government is expected to use the Budget to stimulate growth, analysts do not anticipate a major increase in capital expenditure.

From the Sensex pack, Sun Pharma, Adani Ports, UltraTech Cement, IndusInd Bank, and NTPC opened with gains, while Titan, Nestle India, Kotak Bank, and Asian Paints traded lower.

Sun Pharma gained over 2%, leading the Sensex, after posting a 15% YoY rise in Q3 net profit to Rs 2,903 crore, surpassing Street estimates of Rs 2,847 crore.

Meanwhile, railway stocks jumped up to 4% as investors bet on a sharp rise in capital expenditure for the sector in the Budget. RVNL, Titagarh Rail Systems, RailTel Corp, Ircon International, and IRFC opened higher by up to 4%.

Experts View

"On the Budget day the market reactions will be quick in response to Budget announcements. A major expectation from the Budget is a cut in personal income tax to provide relief to the middle class and boost consumption, thereby facilitating growth recovery. The extent of the tax relief remains to be seen. The fact is that there is no fiscal space for big relief," said Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

"The market will be looking for growth stimulating measures; not market-related taxation reliefs like changes in the capital gains taxation," Vijayakumar added.

"The market response to the Budget will not last more than a few days. Trends in growth and earnings recovery will dictate the medium to long-term market direction," Vijayakumar said.

Hardik Matalia, Derivative Analyst at Choice Broking, said, "After a flat opening, Nifty can find support at 23,400 followed by 23,300 and 23,200. On the higher side, 23,600 can be an immediate resistance, followed by 23,700 and 23,800."

Global Market

Wall Street stocks slipped and the dollar gained on Friday after President Donald Trump announced tariffs on Canada, Mexico and China, capping a volatile week for markets. The US will impose 25% tariffs on Canada and Mexico, along with 10% on China, White House spokeswoman Karoline Leavitt said on Friday, but she declined to say whether there will be exemptions.

Wall Street shares reversed on Friday to finish in negative territory. The Dow Jones Industrial Average ended down 0.75%, the US S&P 500 stock index lost 0.5%, and the tech-heavy Nasdaq dropped 0.3%.

FII/DII Tracker

The Foreign institutional investors (FIIs) remained net sellers on January 31, as they sold equities worth Rs 1,188.99 crore, while domestic institutional investors purchased equities worth Rs 2,232.22 crore on the same day.

Crude Oil

Oil prices rose in aftermarket trading on Friday as US President Donald Trump said he expects his administration to decrease proposed tariffs on Canadian oil from 25% to 10%, and to impose duties on oil and gas around Feb. 18, later than initially feared.

US West Texas Intermediate crude rose 73 cents, or 1%, to $73.48 a barrel after closing down 20 cents, or 0.3%, at $72.53.

Brent crude futures for April rose 54 cents, or 0.7%, to $76.54 a barrel in extended trading after settling 22 cents lower on Friday. The March contract, which expired on Friday, had settled down 11 cents at $76.76 a barrel.

(With inputs from agencies)