Nifty 50 Hits 5-Month Low: What’s Next for Indian Investors?
The Nifty 50 hit a five-month low on February 1, decisively breaking below the recent consolidation range of 24,900–25,500 as bears tightened their grip on the market post the Union Budget. The pressure came after the Budget hiked the Securities Transaction Tax (STT) on futures and options premiums, even as it maintained the fiscal consolidation path, increased capex, and aimed to boost economic growth.
Nifty Outlook for February 2
25,000 is likely to act as immediate resistance for the Nifty 50, while 24,500 is seen as immediate support. The index slipped below all key moving averages, while momentum indicators weakened amid a spike in the India VIX. Market participants were expecting the Nifty 50 to hold 24,900 (the previous week’s low), but that level failed to provide support.
Given the prevailing bearish sentiment, if the index breaks the 24,500–24,300 zone — the next crucial support area — a sharp sell-off cannot be ruled out in the coming sessions. However, holding Sunday’s low of 24,572 could help stabilise the market and signal the formation of a new bottom, though confirmation is still required. In that case, 25,000 is expected to act as immediate resistance, followed by the 200-day EMA at 25,160, experts said.
Bank Nifty Analysis
The Bank Nifty mirrored the broader market weakness, plunging 1,193 points (2 percent) to close at 58,417, and forming a long red candle on the daily charts. The index closed decisively below its 10-, 20-, and 50-day EMAs, signalling a weakening short-term trend. However, it managed to hold the 100-day EMA and a key trendline support on a closing basis, which is a positive sign and could indicate the formation of a bottom in the coming sessions.
Momentum indicators also turned bearish, with the RSI declining to 41.16, while the MACD remained below the reference line with weakness visible in the histogram. Going forward, the 57,800–57,700 zone is expected to offer immediate support. 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.
India VIX Spikes to 8-Month High
The India VIX, often referred to as the market’s fear gauge, spiked to 16.11 during the session before settling at 15.1, its highest closing level since June 4, 2025, marking a rise of 10.73 percent, which remains a major concern for bulls. For more information on how to navigate market volatility, visit our Volatility Trading Strategies page.
Weekly Options Data Analysis
Weekly options data suggest that 25,000 is likely to act as immediate resistance, while 24,500 is seen as immediate support. The maximum Call open interest was observed at the 25,400 strike, followed by 25,300 and 25,000, with the highest Call writing at 25,000, 25,400, and 25,300 strikes. On the Put side, the 24,500 strike held the maximum open interest, followed by 25,000 and 24,300, while the highest Put writing was seen at 24,100, 24,700, and 24,400 strikes.
To learn more about options trading and how to use options data to inform your investment decisions, check out our Options Trading Strategies page. For the latest news and updates on the Indian stock market, visit our Indian Stock Market News page.
