Market Wrap

Indian equities ended the week on a fragile note after a sentiment-heavy Budget session flipped the short-term setup on its head. The Nifty 50 had shown resilience earlier—extending gains for a third straight session, defending the 200-day SMA, and closing above 25,400.

That stability didn’t last.

The announcement of a higher Securities Transaction Tax (STT) on the F&O segment triggered a swift, knee-jerk sell-off. The index cracked below recent swing lows and briefly breached the crucial 25,000–24,900 support band. A smart intraday rebound lifted prices back toward 25,100, but persistent selling in the final hour dragged the index down to close near 24,825.

This marks the fourth consecutive negative weekly close—a sign that confidence has taken a hit and traders are reassessing positioning amid higher derivatives costs.

Sectorally, the damage was broad-based. The Nifty IT stood out as the only pocket of relative strength, offering some defensive ballast while most sectors felt the pressure.

Global cues didn’t help. Asian and European markets stayed mixed-to-weak, reflecting continued risk aversion around growth, rates, and policy direction.

What's Ahead

Near-term sentiment is likely to remain cautious as markets fully digest the Budget’s implications—especially the higher trading costs in derivatives.

Key watchpoints for the week:

• Whether Nifty can hold the 24,700–24,800 support zone

• FII positioning and flows post-Budget

• Follow-through reaction to the STT hike in F&O activity and volumes

• Global market stability and macro data releases

• Selective buying from domestic institutions to stabilize dips

A meaningful recovery will need two things: calmer global cues and consistent domestic buying. Until then, expect elevated volatility, sharper intraday swings, and a market that rewards selectivity over aggression.

Institutional Activity

Market Snapshots

Sectoral Performance

Technical Outlook

Nifty 50

Nifty slipped 98.25 points to close at 25,320.65 after early gains fizzled out, reflecting profit booking, foreign outflows, rupee weakness, and pre-Budget caution that kept banking and IT under pressure. Intraday, the index oscillated between 25,213 and 25,370 before settling lower, signalling fragile sentiment and lack of follow-through buying. Momentum indicators are softening, with RSI drifting toward the 40 mark—an early sign of rising selling pressure and weakening strength. The price structure suggests consolidation with a negative bias unless the index reclaims higher ground quickly. Immediate supports are placed at 25,102 and 24,953, while resistance is seen at 25,584 and 25,733.

Bank Nifty

Bank Nifty declined 347.40 points to 59,610.45 as the recent upmove showed signs of fatigue, with muted price action and limited participation from heavyweight banks. Despite a brief push toward 59,900 intraday, the index failed to sustain momentum and drifted lower through the session. RSI hovering near the 50 mark indicates neutral momentum, but the inability to extend gains suggests hesitation among buyers. The setup points to range-bound movement with a cautious undertone. Key support levels lie at 59,112 and 58,803, while resistance stands at 60,109 and 60,418.

Nifty Financial Services

FinNifty fell 178.75 points to close at 27,330.85 amid broad-based weakness across financial counters, with sharper cuts in NBFCs and select lenders weighing on the index. Market breadth remained weak, underscoring selling pressure across constituents. The price action reflects distribution near recent highs, suggesting traders are lightening positions rather than building fresh longs. Immediate supports are placed at 27,101 and 26,950, while resistance is seen at 27,587 and 27,737, indicating a tight trading band likely to persist in the near term.

Sensex

Sensex shed 296.59 points to end at 82,269.78 as losses in heavyweight metal, banking, and IT stocks outweighed selective buying in defensives. The index traded with a negative bias through the session, and the broader breadth remained weak at 13 advances versus 17 declines. The structure suggests mild distribution at higher levels, with momentum cooling after recent attempts to stabilize. Immediate supports are placed at 81,498 and 81,035, while resistance is marked at 82,994 and 83,457.