Market Wrap

After Friday’s steep decline, Indian equities bounced back strongly on Monday, demonstrating resilience near crucial support levels. The Nifty opened on a weak note with a gap-down but steadily pared losses through the morning and gained traction in the latter half of the session. The index eventually surpassed Friday’s high intraday and closed just below the 25,700 mark, ending the day with gains of about 0.83%.

Banking stocks led the recovery after an initial wobble, providing the backbone for the broader market’s advance and significantly improving sentiment. The move also broke the index’s three-session losing streak, reinforcing the importance of the 25,500–25,400 support zone, which held firm despite recent volatility.

Global cues were mixed Wall Street had ended lower on Friday but Asian and European markets traded higher on Monday, effectively decoupling from U.S. weakness and boosting risk appetite. Meanwhile, China’s markets remain shut for the Lunar New Year, potentially keeping regional liquidity somewhat thinner this week.

From a technical perspective, immediate supports are placed at 25,600 and 25,550, while resistance is seen near 25,760 and 25,820, followed by a broader supply zone around 25,800–25,900. The recovery also highlights ongoing sector rotation, with selective pockets of the market outperforming despite choppy broader conditions.

What's Ahead

With weekly derivatives expiry approaching, volatility is likely to pick up, though a sharp one-directional move appears unlikely in the near term.

A key global trigger will be the release of the FOMC meeting minutes later this week, which could provide crucial clues on the U.S. Federal Reserve’s policy outlook and influence global risk sentiment.

Domestically, the market’s trajectory will hinge largely on banking stocks and stock-specific action. Sustaining above the 25,600 level will be critical for the Nifty to build momentum toward the 25,800–25,900 resistance band. Failure to hold this zone could invite renewed consolidation or profit-taking.

Overall, traders should brace for a range-bound yet volatile market environment, with selective opportunities emerging amid ongoing sector rotation.

Institutional Activity

Market Snapshots

Sectoral Performance

Technical Outlook

Nifty 50

The NIFTY 50 staged a solid recovery, closing at 25,682.75 with gains of 0.83% after early weakness, supported by strong buying in PSU, power, and banking stocks along with short covering in heavyweights. The index formed a higher intraday structure by bouncing from the 25,372 zone and sustaining near the day’s high, indicating improving sentiment. Momentum indicators are turning positive, with RSI moving upward near the 50 mark, suggesting a shift from neutral to mildly bullish bias. As long as the index holds above the immediate support band of 25,265–25,007, pullbacks may attract buying interest, while a sustained move above the 26,100 level could open the path toward 26,359. However, continued weakness in IT stocks may cap sharp upside, keeping the near-term outlook cautiously positive with stock-specific action likely to dominate.

Bank Nifty

The NIFTY BANK index outperformed broader markets, closing at 60,949.10 with a strong 1.27% gain, driven by broad-based buying across PSU and private sector banks. After an initial dip below 60,000, the index recovered steadily throughout the session, signaling strong demand at lower levels and reinforcing bullish undertones. RSI has rebounded toward the 60 zone, indicating strengthening upward momentum and improving participation across constituents. Immediate supports are placed at 60,009 and 59,428, and as long as these levels hold, the index may attempt a move toward resistance at 61,889 followed by 62,470. The overall technical structure remains constructive, with dips likely to be bought, though short-term volatility may persist due to expiry-related positioning.

Nifty Financial Services

FINNIFTY ended higher at 28,306.25, gaining 0.64% on the back of strength in PSU lenders, private banks, and select NBFCs, reflecting continued rotation within the financial space. The index maintained a positive bias despite weakness in a few heavyweight NBFC names, indicating underlying resilience. As long as it sustains above the immediate support zone of 27,837–27,538, the structure remains favorable for a gradual upward move toward resistance at 28,802 and 29,101. Momentum is improving but not yet overheated, suggesting room for further upside if banking strength persists, although selective profit booking in NBFCs could limit aggressive advances.

Sensex

The BSE SENSEX climbed 650.39 points to close at 83,277.15, supported by strong buying in power, banking, and select large-cap stocks, while losses in auto, IT, and financial names capped the rally. The index recovered from early declines and closed firmly above key short-term levels, indicating renewed buying interest after recent consolidation. With market breadth positive and heavyweights leading the move, the near-term trend appears constructive as long as the index holds above supports at 81,891 and 81,019. On the upside, resistance is seen at 84,710 followed by 85,582, and a decisive breakout above this zone could trigger fresh momentum. Overall, the outlook remains mildly bullish with intermittent consolidation likely amid sector rotation.