Budget Week Ahead, Jan. 26 -- Indian equity markets are expected to remain cautious in the holiday-shortened week as investors brace for the Union Budget for FY26-27, a key event that has historically driven sharp market moves and sectoral churn. With the Union Budget just days away, risk appetite has moderated amid persistent foreign institutional investor outflows, geopolitical uncertainties and mixed December-quarter earnings.

While expectations of some relief on US tariff measures and progress on the India-European Union free trade agreement may offer intermittent support, market participants appear reluctant to take aggressive positions ahead of policy clarity. The Indian stock market remained closed on January 26 for Republic Day, ...