US Fed Policy, Union Budget to Delhi Assembly election: Top 5 factors that can dictate the Indian stock market next month

The Indian stock market started 2025 with a negative process and experienced a sharp sale in all sectors. Both benchmark indices, Sesex and Nifty 50 have fallen by more than 3% to date in January.

The recession in the stock market is mainly powered by a trifecta of factors: modest business profits, stretched valuations and persistent foreign portfolio investments (FPI). The FPIs have discharged Indian shares that are worth it £So far 67,000 crore this month.

As we move to February, it is expected that various important developments will influence the performance of the Indian stock market. Here are the top five factors that the market trends can form in the coming month.

Our FED policy

US Federal Reserve will announce its first monetary policy decision of 2025 on January 29. The two -day meeting of the Federal Open Market Committee (FOMC) is planned from 28 to 29 January, whereby the decision of the interest rate will be announced on January 29. This will also be the first FED policy after US President Donald Trump was in charge of the White House.

The American Fed is expected to keep the interest rates on hold, but the larger story that unfolds will be how the central bank confronts early movements by President Donald Trump, who will probably form the economy this year, including the FED the loan costs Continues, Reuters reported reported.

Union Budget 2025

Finance Minister Nirmala Sitharaman will present the trade union budget for 2025-2026 on 1 February, Saturday. The 2025 budget is expected to focus on continuous investments in infrastructure and fundamental demand stimulation measures to stimulate economic recovery. Analysts also expect that the intended tax deficit will be around 4.5% of GDP, which reflects the government’s dedication to maintain macro -economic stability in the midst of global uncertainties.

For the Indian stock market, the most important things to look at are the size of tax consolidation, the delta in expenditure on physical and social infrastructure and sector level -incentives/spending.

RBI policy

The Reserve Bank of India (RBI) will announce its monetary policy in the first week of February. The next meeting of the RBI Monetary Policy Committee (MPC) is planned for 5 to 7 February. This will be the first RBI policy among the new Governor Sanjay Malhotra.

On Monday, the RBI announced for the much needed liquidity of £1.5 Lakh Crore in the system for a certain period through a combination of forex and money market measures, which sets the stage for a potential rate reduction next week.

RBI said it will be worth buying government effects £60,000 crore via Open Market Operations (Omos) in three tranches of £20,000 crore each. RBI will also perform a repo auction of 56 days variable rate £50,000 crore on 7 February and dollar/rupid sell Swap auction of $ 5 billion for a tenor of six months on January 31.

Deepseek AI care

The rise of a cheap Chinese artificial intelligence model Deepseek AI has led to a steep sale in American chip makers and technological shares worldwide. Japanese technological shares also fell in the midst of a worldwide market route that was fueled by the worries about Deepseek, in which investors questioned the heaven -high appreciation and dominance of AI Bell Leghers.

Delhi Assembly Election 2025

The elections at the 70-person Delhi meeting are planned for 5 February. The results will be announced on 8 February.