The Indian stock market is in sharp focus on Sunday as Finance Minister Nirmala Sitharaman presents the Union Budget 2026, her ninth consecutive budget. Investors are closely tracking announcements as the Budget comes at a time when India remains one of the fastest-growing large economies, even as global uncertainties and geopolitical risks persist.
Market experts believe sentiment is likely to remain event-driven through the day, with expectations evenly balanced between growth-oriented measures and fiscal discipline. Vinod Nair, Head of Research at Geojit Investments, said that while strong domestic fundamentals continue to support markets, global factors such as tariff developments, geopolitical tensions and the US Federal Reserve’s policy stance could limit sharp upside.
Several sectors are expected to remain in focus depending on policy signals from the Budget.
Technology and AI:
With growing buzz around artificial intelligence, robotics and data centres, the sector is looking for tax incentives and policy support to strengthen India’s domestic AI ecosystem. Companies linked to AI hardware, data infrastructure and digital services are expected to react to any favourable announcements. Stocks to watch include Tata Elxsi, Netweb Technologies, Bharti Airtel (Nxtra Data) and RailTel.
Renewable energy and power:
The government’s clean energy push is expected to continue, with industry players seeking support for grid stability and energy storage. Key expectations include extension of production-linked incentive schemes across the solar value chain, incentives for battery storage, green hydrogen and nuclear energy solutions. Stocks in focus include Tata Power, Adani Green Energy, NTPC, Suzlon Energy and Hitachi Energy.
Defence:
Defence remains a key pillar under the Atmanirbhar Bharat initiative. Analysts expect a potential increase in defence capital expenditure, along with higher funding for research and development in areas such as drones, artificial intelligence and cyber warfare. Defence public sector stocks like Bharat Electronics, HAL, Mazagon Dock, Cochin Shipyard and Bharat Dynamics are likely to stay active.
Overall, markets are expected to remain range-bound, reacting sharply to sector-specific announcements, as investors weigh growth support against fiscal prudence in Budget 2026.