MarketSmith India Unveils Expert Stock Picks for 2 February Following Budget-Induced Market Turmoil
In a significant market update, MarketSmith India has released its top stock recommendations for 2 February 2026, providing investors with strategic insights during a period of heightened volatility. The advisory comes on the heels of a historic special Sunday trading session that coincided with the Union Budget 2026, which triggered a broad-based sell-off across Indian equity markets.
Market Context: A Volatile Post-Budget Landscape
The Indian stock market experienced a sharp downturn during the special Sunday session, primarily driven by a hike in the securities transaction tax (STT) on derivatives. This policy move dampened investor sentiment, leading to a significant decline in key indices. The Nifty 50 plunged by 1.96% to close at 24,825.45, while the S&P BSE Sensex crashed by 1,546.84 points, settling at 80,722.94.
Market breadth was overwhelmingly negative, with only 6 out of 50 Nifty constituents ending in the green. Sectorally, the Nifty PSU Bank and Nifty Metal indices were the worst performers, tumbling over 4% due to concerns over high government borrowing and falling global commodity prices. In contrast, IT stocks managed to buck the trend, gaining nearly 0.6%, supported by favorable changes in the taxation of share buybacks.
Despite the immediate negative reaction to increased transaction costs, analysts note that the underlying fiscal discipline and infrastructure focus in the budget provide a pragmatic long-term outlook for structural growth. This backdrop sets the stage for MarketSmith India's carefully curated stock recommendations.
Detailed Stock Recommendations from MarketSmith India
MarketSmith India has identified two stocks with strong potential for growth, based on a combination of fundamental and technical analysis. Here are the detailed recommendations:
Buy: Sterlite Technologies Ltd
Current Price: ₹113
Buy Range: ₹111-114
Target Price: ₹130 in two to three months
Stop Loss: ₹104
Why It's Recommended:
- Strong play on 5G, fiberization, and digital infrastructure themes.
- Beneficiary of government capex on telecom, broadband, and smart cities initiatives.
- Presence across optical fiber, networking, and global telecom solutions.
- Export exposure provides significant global growth opportunities.
- Long-term demand visibility from rising data consumption and cloud expansion.
Key Metrics:
- P/E Ratio: 235.95
- 52-Week High: ₹140.40
- Volume: ₹297.24 crore
Technical Analysis: The stock has shown a trendline breakout and has reclaimed its 100-day moving average (DMA), indicating positive momentum.
Risk Factors:
- High debt levels impacting balance-sheet strength.
- Cyclical nature of telecom capex spending.
- Margin pressure due to volatile raw material prices.
- Intense competition in optical fiber and telecom equipment segments.
- Dependence on large telecom operators' spending cycles.
Buy: Netweb Technologies India Ltd
Current Price: ₹3,300
Buy Range: ₹3,290-3,320
Target Price: ₹4,000 in two to three months
Stop Loss: ₹3,000
Why It's Recommended:
- Rising demand for high-performance computing (HPC), AI, and data centre solutions.
- Strong order book visibility and execution capability.
- Government focus on indigenous technology and Make-in-India initiatives.
Key Metrics:
- P/E Ratio: 99.97
- 52-Week High: ₹4,479
- Volume: ₹747.89 crore
Technical Analysis: The stock has exhibited a trendline breakout, signaling potential upward movement.
Risk Factors:
- High dependence on government and institutional orders.
- Margin sensitivity to component costs.
- Potential supply chain disruptions.
Broader Market Performance and Technical Outlook
Indian equities extended their corrective phase on Monday, with the Nifty 50 declining 1.96% to close at 24,825. The index oscillated between 24,571 and 25,441 during the day, reflecting sustained risk-off sentiment. Market breadth was decisively weak, with 2,073 stocks declining against 1,054 advances, highlighting widespread participation in the sell-off.
Sectorally, the pressure was led by cyclicals and defensives alike. PSU banks were the worst hit, shedding over 5.5%, followed by metals (-4.0%), oil & gas (-2.9%), FMCG (-2.3%), and financial services (-2.4%). Auto and realty stocks also saw notable profit-taking. IT was the lone pocket of resilience, closing marginally higher as selective buying emerged on expectations of currency support and valuation comfort.
From a technical standpoint, the Nifty 50 has shown a clear deterioration in price structure. The latest session marked a sharp bearish candle accompanied by elevated volumes, signaling distribution rather than a routine pullback. The index has decisively broken below its short- and medium-term moving averages, reflecting a loss of upside momentum. Momentum indicators like the RSI and MACD corroborate the negative bias, with the RSI slipping into the low-30s zone and the MACD firmly in negative territory.
As per O’Neil’s market direction framework, the Nifty 50 index remains classified under a downtrend. Traders are advised to remain selective and prioritize risk management. The index has slipped below its 200-day moving average and the 24,900 mark, underscoring a weakening in the medium-term trend. On the downside, the 24,600-24,300 zone is expected to provide immediate cushion, while a deeper corrective phase could see buying interest near the 24,000 level. On the upside, the index is likely to remain range-bound between 24,600 and 25,400 in the near term.
Nifty Bank Performance and Outlook
The Nifty Bank index opened flat at 59,607.65 and attempted a brief move higher in early trade, hitting an intraday high of 59,865.70. However, sustained selling pressure led to sharp profit-taking, with the index slipping to an intraday low of 57,783.20 before closing at 58,417.20, down 1,193.25 points (-2.00%) for the day.
From a momentum perspective, the RSI (14) moved towards the downside and is placed near 41, indicating weakening momentum. The MACD has slipped further into negative territory, highlighting a short-term bearish bias. As per O’Neil’s framework, the Nifty Bank remains classified under an Uptrend Under Pressure, suggesting that declines may be corrective rather than trend-reversing at this stage.
On the technical levels, immediate support for the Nifty Bank is placed in the 58,000-57,800 zone, coinciding with the 100-DMA, while stronger medium-term support is seen near 56,800, aligned with the 200-DMA. On the upside, the 59,500-59,600 zone has emerged as immediate resistance, with a major psychological hurdle near 60,000. A sustained move above these levels is essential to restore bullish momentum.
About MarketSmith India
MarketSmith India is a premier stock research platform and advisory service focused on the Indian stock market. It offers a suite of tools and resources designed to help investors make informed decisions based on the CAN SLIM methodology, founded by legendary investor William J. O'Neil. The platform provides a 10-day free trial for new registrants, allowing users to explore its comprehensive features. The service operates under the trade name William O’Neil India Pvt. Ltd. and holds SEBI Registration No. INH000015543.
Disclaimer: The views and recommendations presented in this article are those of individual analysts and do not represent the views of Mint. Investors are advised to consult with certified experts before making any investment decisions.
