Post Budget Blues: Indian Stock Markets Likely to Open Cautiously Negative on Monday
Indian stock market benchmarks – Sensex, Nifty 50 are likely to witness a cautious to mildly negative opening on February 2 as investors continue to process key Budget announcements along with weak global cues. The absence of market-friendly tax relief and the sharp increase in Securities Transaction Tax (STT) on derivatives are expected to weigh on early sentiment, particularly in high-beta and F&O-heavy counters.
According to Aakash Shah, Technical Research Analyst at Choice Equity Broking, Indian equities are likely to see a cautious to mildly negative opening on Feb 2 as investors digest key Budget announcements alongside weak global cues.
Technical Levels to Watch
From a technical perspective, markets are in a consolidation-to-corrective phase, and key levels will determine the immediate direction. Shah highlighted that for the Nifty 50, the immediate support lies between 24,500 and 24,400, while resistance is placed in the 25,000–25,150 zone. A decisive move above 25,150 could open the path toward 25,550.
Mayank Jain, Market Analyst, Share.Market also believes investors should prepare for volatility when the market opens on Monday morning. The market is still trying to balance the bad news of the trading tax (STT) hike against the good news of the government’s growth plans.
Important Levels on Monday
Immediate Support: 24,500 – 24,400. The 24,500 strike currently holds the maximum Put Open Interest (OI), which significantly increases its importance as a key floor for the index.
Immediate Resistance: 25,000 – 25,100. This zone now acts as a stiff ‘supply wall’ on any recovery attempts. Additionally, these levels carry significant Call Open Interest, suggesting that sellers are likely to defend this range aggressively.
Market Reaction to Budget Announcements
On Sunday, February 1, markets reacted sharply after Finance Minister Nirmala Sitharaman announced a steep hike in STT on derivatives. STT on futures was raised to 0.05% from 0.02%, and on options to 0.15% from 0.01% earlier.
The BSE Sensex fell 1,547 points, or 1.88%, to close at 80,722.94, while the Nifty 50 declined 495 points, or 1.96%, to settle at 24,825.45. Nearly ₹10 lakh crore in investor wealth was wiped out as total market capitalisation fell to ₹450 lakh crore from ₹460 lakh crore.
Broader markets were also hit hard, with the BSE MidCap index down 1.91% and the SmallCap index falling 1.61%. Sectorally, Nifty PSU Bank plunged 5.57%, Metal index dropped 4.05%, and Oil & Gas, Financial Services, Auto, FMCG, and Realty indices fell over 2%. Nifty Bank ended 2% lower at 58,417.20.
Fundamentals Still Supportive Despite Volatility
Despite the volatility, analysts believe the broader economic and earnings outlook remains intact. The Budget’s fiscal discipline, record ₹12.2 lakh crore capex plan, and infrastructure-led growth strategy continue to support the long-term equity narrative.
Divam Sharma of Green Portfolio PMS noted that consistent capex-led growth may support higher long-term valuations, especially for cyclical and capital goods stocks, helping restore investor confidence once short-term noise subsides.
As markets open on Monday, traders are likely to remain cautious near resistance levels, while long-term investors may look at declines as opportunities in fundamentally strong sectors. The initial reaction may remain muted or weak, but technical supports and strong macro fundamentals could limit deeper downside, setting the stage for stabilisation after the Budget-induced shock.
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