MARKET SUMMARY
Indian markets are set for a positive opening after a challenging week, with GIFT Nifty trading 76 points higher at 25,165.50. Despite this, underlying weakness remains as the Nifty breached critical support levels on Friday, closing below the 200-day moving average at 25,048.65. This indicates a retreat by bulls. While today’s pre-market signals suggest recovery attempts, technical analysts caution that conviction remains fragile amid elevated volatility as Budget week approaches.
KEY DRIVERS
– Technical Rebound Attempt: A sharp bounce from the 24,900 support level on Wednesday now serves as immediate support for the monthly expiry. A break below this could lead to declines toward 24,600–24,500.
– Elevated Volatility Ahead: India VIX rose 6.31% to 14.19, reaching its highest closing level since June 19, 2025, indicating heightened uncertainty as Budget announcements near.
– Global Headwinds: Asian equities weakened due to resurfacing tariff concerns following President Trump’s threats on South Korean goods, creating uncertain sentiment for risk assets.
– Rupee Pressure: The Indian rupee hit a historic low of 92 against the USD on January 23, potentially increasing import costs and stoking inflation concerns.
SECTORS TO WATCH
Bank Nifty is experiencing sustained selling pressure after breaking the 58,800 support zone and closing below lower Bollinger Bands. Defensive sectors may attract investors given the elevated VIX and technical weakness, while export-oriented sectors could benefit from rupee depreciation.
EVENTS
Budget week begins, and elevated volatility with sharp swings on both sides is expected. Key resistance zones are 25,350–25,450 and 25,600. Maximum call open interest at the 25,500 strike (1.68 crore contracts) acts as potential resistance.
RISKS
– Bearish Technical Setup: RSI at an oversold 29.12 with MACD below the signal line indicates continued weakness.
– Budget-Induced Swings: Volatility is expected to remain elevated through the week, creating unpredictable price movements.
CLOSING NOTE
Recovery attempts face challenges. Proceed cautiously until the index decisively reclaims 25,600 levels.