Nifty Slides on Budget Shockwave: What’s Ahead for Markets?

Indian equity markets faced sharp volatility following the Union Budget 2026, as the increase in Securities Transaction Tax (STT) on F&O trading weighed heavily on market sentiment.

In the special Sunday session, Nifty declined 495 points (-1.96%), closing at 24,825. Market uncertainty rose sharply, with India VIX climbing to 15.10, marking an 8-month high.

◉ Technical Setup
Nifty has broken below its rising channel, confirming that this isn’t just a healthy correction.
The structure now points toward a positional downtrend, with sellers firmly in control.

◉ Key Levels to Watch

Support Levels
24,500 – 24,400: Immediate support zone
24,000 – 23,900: Strong demand area with significant put writer positioning

Resistance Levels
25,000 – 25,100: Near-term resistance
25,500 – 25,600: Major supply zone

◉ Key Triggers for the Week

RBI Monetary Policy Meeting (Feb 4–6)
The RBI is widely expected to pause rates, after cutting 125 bps since Feb 2025, bringing the repo rate to 5.25%.

Q3 FY26 Corporate Earnings
A busy earnings calendar may influence index movement. Key companies reporting include State Bank of India SBIN, Bharti Airtel BHARTIARTL, LIC LICI, Adani Enterprises ADANIENT, and RVNL $NSE:RVNL.

Institutional Flows
After turning net sellers on Budget day, FII-DII activity will be closely watched.

◉ Weekly Outlook
The near-term outlook remains cautiously bearish with elevated volatility.
Nifty is expected to consolidate in the 24,500–25,100 range.

A sustained move above 25,200 is required to improve the technical outlook. Until then, upside attempts may face selling pressure.

◉ Trading Perspective
The market currently favours a sell-on-rise approach.
Aggressive long positions should be avoided unless Nifty closes above 25,200 on a daily basis.