The Indian stock market is poised for a recovery on Monday, with benchmark indices Sensex and Nifty 50 likely to open higher following the steep decline witnessed in the special trading session on Sunday. This anticipated stabilization comes amid mixed global market cues and positive indications from Gift Nifty futures.
Market Outlook After Budget 2026 Fall
On Sunday, the Indian equity markets experienced a significant downturn after Finance Minister Nirmala Sitharaman announced an increase in the Securities Transaction Tax (STT) on futures and options (F&O) trading in her Budget 2026 speech. This proposal rattled investor sentiment, leading to sharp losses across major indices.
The Sensex plummeted 1,546.84 points, or 1.88%, to close at 80,722.94, while the Nifty 50 settled 495.20 points, or 1.96%, lower at 24,825.45. The Gift Nifty, which provides an early indication of market direction, was trading around 24,875 level on Monday morning, representing a premium of nearly 22 points from the Nifty futures' previous close.
Technical Analysis: Sensex Prediction
Shrikant Chouhan, Head of Equity Research at Kotak Securities, noted that Sensex formed a long bearish candle on daily charts and is currently trading below the 200-day Simple Moving Average (SMA), which indicates a largely negative sentiment.
"We are of the view that the short-term market texture is volatile, and volatility is likely to continue in the near future," said Chouhan. "Hence, level-based trading would be the ideal strategy for day traders. On the higher side, 81,300 would act as a crucial resistance zone. As long as Sensex is trading below this level, weak sentiment is likely to prevail."
On the downside, Chouhan expects the correction wave to continue till 80,100-79,900, with further downside potentially dragging Sensex to 79,600-79,000. Conversely, if Sensex manages to climb above 81,300, the index could move up to 81,900 or the 200-day SMA level.
Nifty 50 Technical Outlook
Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, observed that Nifty 50 formed a long bear candle with a lower shadow on the daily chart. "Technically, this market action indicates a decisive break down of the crucial support at 25,000 levels. This is not a good sign," he stated.
Shetti explained that the negative chart pattern of lower tops and bottoms remains intact on the daily chart, and the present weakness could align with the formation of a new lower bottom, which needs confirmation. According to his analysis, the next lower support for Nifty 50 to watch is at 24,500-24,400, while immediate resistance is placed around 24,900-25,000 levels.
Ponmudi R, CEO of Enrich Money, added that Nifty 50 is now consolidating below its earlier breakdown area, indicating a clear sell-on-rallies structure in the near term. "As long as Nifty 50 remains below the 25,200-25,300 resistance band, the bias stays cautious to bearish. Only a sustained move back above 25,300 would neutralise the negative undertone and signal short-term stabilisation," he emphasized.
Bank Nifty Technical Perspective
The Bank Nifty index ended 1,193.25 points, or 2.00%, lower at 58,417.20 on Sunday, forming a bearish candle with a lower shadow on the daily chart. This pattern highlights heavy intraday volatility followed by marginal recovery attempts.
Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, noted that "Bank Nifty index slipped below both its 20-day and 50-day EMA, signalling a weakening short term trend." He pointed out that intraday selling dragged the index to a low of 57,783, from where it managed to stage a mild pullback. "Going forward, the zone of 57,800-57,700 is expected to offer immediate support," Shah added.
Shah believes a sustained move below 57,700 may intensify the downside and pave the way for further correction toward 57,200, followed by 56,500 in the short term. On the upside, the 50-day EMA zone of 59,000-59,100 will act as a crucial resistance area.
Ponmudi R highlighted that the Bank Nifty index slipped below multiple key supports with firm bearish price action, signalling a transition into a corrective phase. "Rejection near the 59,800-60,000 supply zone further reinforced seller dominance. The drift towards the 58,600-58,500 region keeps downside risks elevated if buying support does not emerge," he explained.
According to Ponmudi R, "Overall, the structure remains weak to bearish. Bank Nifty must decisively reclaim the 59,300-59,400 zone to stabilise and attempt a move towards 59,800-60,000, while a sustained break below 58,000 could open the door for deeper downside in the coming sessions."
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
