Budget Week Ahead: Indian equity markets are expected to remain cautious in the holiday-shortened week as investors brace for the Union Budget for FY26–27, a key event that has historically driven sharp market moves and sectoral churn. With the Union Budget just days away, risk appetite has moderated amid persistent foreign institutional investor outflows, geopolitical uncertainties and mixed December-quarter earnings.

While expectations of some relief on US tariff measures and progress on the India–European Union free trade agreement may offer intermittent support, market participants appear reluctant to take aggressive positions ahead of policy clarity. The Indian stock market remained closed on January 26 for Republic Day, with trading set to resume on Tuesday, keeping volatility elevated in the sessions ahead.

Nifty 50: Technical Support and Resistance levels

Hitesh Tailor, Research Analyst at Choice Broking, said the Nifty witnessed heightened volatility over the past week, recording a high of 25,653 and a low of 24,919.80 before closing at 25,048.65, down around 645 points on a weekly basis. He noted that while the index formed a strong bearish candle on the weekly chart, it managed to take support near the 50-week EMA, indicating some demand at lower levels.

“On the daily timeframe, the Nifty has closed decisively below the crucial 25,100 level and is trading below all major EMAs, including the 200-day EMA, reflecting a weakening market structure,” Tailor said.

According to him, immediate resistance for the Nifty is placed at 25,300, followed by 25,400 and 25,600, while key support lies at 24,880 and 24,587. A breakdown below 24,350 could intensify downside pressure, keeping the overall bias sideways to bearish.

Analysts advise caution as Budget week keeps traders on edge

Echoing a cautious outlook, Amol Athawale, Vice President – Technical Research, said the market’s structure remains weak as long as the Nifty trades below its 100-day simple moving average near 25,500. He highlighted that 24,900 is an immediate support level, below which selling pressure could accelerate sharply.

“As long as the index remains below 25,500, the weak formation is likely to continue, while a move above 25,200 could trigger a quick pullback towards 25,350–25,500,” Athawale said.

Ajit Mishra, Senior Vice President – Research at Religare Broking, also pointed out that the Nifty slipping below its long-term 200 DEMA signals the possibility of further downside in the near term. He identified the 24,750–24,900 zone as the next crucial support area, while 25,300–25,400 is expected to act as a strong hurdle on any recovery attempt.

“The break below long-term averages warrants caution, and participants should maintain a selective and balanced approach with strict control on position sizing,” Mishra said.

With Budget-related expectations, global trade developments and currency movement all converging this week, analysts believe volatility is likely to remain elevated, making key support and resistance levels critical for traders navigating the sessions ahead.

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.