MARKET SUMMARY
Indian markets are expected to open flat to mildly positive today. Gift Nifty is around 25,870, indicating stability after yesterday’s budget-led selloff. However, the selling pressure from the Securities Transaction Tax (STT) hike on derivatives could limit the upside and keep volatility high. Traders should be vigilant for quick reversals near key support levels.
KEY DRIVERS
– Budget Hangover & STT Shock: The market is still feeling the effects of a lackluster Union Budget 2026 and the unexpected STT hike on derivatives, which reduced liquidity and caused sharp declines. Foreign Institutional Investors (FIIs) net sold ₹588 crore and Domestic Institutional Investors (DIIs) ₹683 crore yesterday. Stay alert for fresh capital flows.
– Global Cues Mixed: The softening of crude oil prices eases inflation concerns, but uncertainty around the US Federal Reserve and cautious trends in Asia weigh on markets. Potential bargain hunting could lead to intraday bounces.
– Technical Setup: Nifty has support at 24,720 and 24,575, with resistance at 24,935 (spot) or 25,325+ according to Open Interest data. A possible strategy is to buy dips above 24,720 targeting 24,935, provided volume builds.
– Earnings Momentum: Strong Q3 earnings releases this week, coupled with budgetary boosts to infrastructure and manufacturing, offer upside triggers for selective long positions.
SECTORS TO WATCH
– Bullish Bets: Infrastructure, manufacturing, and metals sectors are likely to perform well due to budget allocations and falling crude prices. Consider momentum plays in Adani Green and Shriram Finance.
– Cautious/Weak: Financials and stocks heavily involved in derivatives trading may be vulnerable to liquidity issues due to the STT increase. Bank Nifty has support at 57,990 and resistance at 60,420; avoid fresh shorts below 59,610.
EVENTS
Key Q3 earnings reports are expected from major companies like Blue Star. Watch for Reserve Bank of India (RBI) policy hints and FII/DII data after market open to guide your intraday strategy.
RISKS
– Persistent FII selling and budget-related volatility could break the 24,720 support, leading to further downside.
– Global risk-off events from the Fed or commodity price swings could increase market whipsaws. Using tight stop-loss orders is essential.
CLOSING NOTE
Maintain a cautiously optimistic outlook. Prepare for volatile swings, prioritize technical levels, and seek value opportunities created by budget-related dips for profitable trades today.