Volatile Tuesday: Nifty Defends 25,000 as Budget Countdown Begins

Nifty Prediction| Market Analysis| Stock Market Tomorrow| Support and Resistance Levels| Gap Up Strategy

Date: January 27, 2026 Market Sentiment: Cautious / Volatile (Pre-Budget Jitters) India VIX: 13.45 (+1.10%)

Market Open and Starting Behavior

After a long weekend (Republic Day holiday on Monday), the Indian equity markets reopened on a nervous note. The Pre-Budget Market Report observes that the Nifty 50 opened flat-to-negative near 25,020, carrying forward the bearish momentum from Friday’s sell-off. The initial hour was characterized by a fierce battle at the psychological 25,000 mark. Bears attempted to drag the index below 24,950, citing weak global cues and persistent FII selling, but aggressive buying in Defense and Infrastructure stocks—fueled by Budget optimism—helped the indices stage a mid-day recovery.

Index Performance Table

Index	Open	High	Low	Close	Change (Pts)	Change (%)
Nifty 50	25,020.10	25,145.50	24,980.30	25,102.40	+53.75	+0.21%
SENSEX	81,450.00	81,800.20	81,350.10	81,680.50	+142.80	+0.18%
Nifty Bank	58,400.10	58,750.40	58,250.00	58,620.15	+120.00	+0.20%
Nifty Defense	8,450.00	8,650.00	8,420.00	8,610.00	+1.89%

Key Takeaway

The market is in a classic “Pre-Budget Consolidation” phase. While the broader trend remains weak (Nifty is still below its 20-day EMA), the defense of the 25,000 support level is a positive signal for bulls. The “Halwa Ceremony” held today officially marked the final stage of the Budget 2026 preparation, shifting investor focus from global trade wars to domestic fiscal expectations.

Reason Behind the Market Movement

1. Budget Euphoria (Halwa Ceremony): The customary Halwa Ceremony at the Finance Ministry triggered a sentiment boost, particularly in sectors expected to benefit from increased capex. Reports suggesting a 30% hike in defense allocations fueled a rally in stocks like HAL and BEL.
2. Short Covering: After falling nearly 1,000 points in the last week, the market was oversold. Traders covered short positions near the 25,000 support zone ahead of the monthly expiry.
3. FICCI Survey Optimism: A pre-budget survey by FICCI projecting 7-8% GDP growth for FY27 helped soothe nerves regarding an economic slowdown.
4. Global Headwinds Persist: Gains were capped by rising US bond yields and the ongoing “Trump Trade War” narrative, which kept IT and Export-oriented sectors under pressure.

Expiry Related Movement

With the Monthly Expiry scheduled for Thursday (Jan 29), significant activity was seen in the derivatives segment. The 25,000 Put option added massive Open Interest (OI), cementing it as a short-term floor. On the upside, Call writers are active at 25,200 and 25,300, suggesting limited upside potential before the Budget.

Top Gainers and Losers

Nifty 50 Gainers:

• HAL (Hindustan Aeronautics): +2.45% (Budget expectations for defense spending).
• Larsen & Toubro (L&T): +1.80% (Infrastructure capex hopes).
• SBI: +1.15% (Value buying in PSUs).
• Adani Ports: +1.10% (Recovery from recent lows).

Nifty 50 Losers:

• Infosys: -1.20% (Pressure from US tariff fears).
• TCS: -0.95% (Muted discretionary spending outlook).
• HDFC Bank: -0.50% (FII selling pressure continues).

Institutional Activity

• FII (Foreign Institutional Investors): Remained net sellers, offloading ₹2,100 Crore (approx).
• DII (Domestic Institutional Investors): Continued to buy, absorbing supply with ₹1,850 Crore in inflows.
• Insight: FIIs are using every rise to exit, while DIIs are accumulating for the long-term Budget story.

Tomorrow Prediction (Wednesday, Jan 28)

The market is likely to remain Range-Bound to Volatile.

• Bullish Case: If Nifty crosses 25,150, it can test 25,250.
• Bearish Case: A break below 24,980 will expose the 24,850 swing low.
• Key Trigger: The US Federal Reserve meeting outcome (expected later this week) and further Budget leaks/rumors.

Trading Strategy for Tomorrow

• Buy on Dips: Focus on Defense and Railways stocks. Any dip in HAL or RVNL is a buying opportunity for a pre-budget swing trade.
• Nifty Level: Long above 25,150 for target 25,240. Stop loss 25,080.
• Avoid: IT and Pharma sectors, as they remain vulnerable to global currency fluctuations.

Conclusion & Expert View

The Pre-Budget Market Report concludes that the bulls have managed to arrest the freefall, but the trend has not reversed yet. The market is waiting for a decisive trigger from the Finance Minister on February 1.

Expert View: “We advise investors to stay light on positions. The 24,800-25,000 zone is a strong accumulation area for long-term portfolios, but traders should expect ‘whipsaw’ movements until the Budget Event is out of the way. Stick to domestic cyclical themes like Infra, Power, and Defense.” — Siddhartha Khemka, Motilal Oswal.

FAQ

1. What is the significance of the Halwa Ceremony?

It marks the beginning of the “lock-in” period for Budget officials to ensure secrecy, signaling that the Budget presentation is imminent (Feb 1).

2. Is the market open on Budget Day (Sunday, Feb 1, 2026)?

Yes, the stock exchanges usually conduct a special trading session during the Budget presentation, even if it falls on a weekend.

3. Why are defense stocks rising?

Investors anticipate a significant increase in the defense budget (potentially up to 30% capital outlay) to modernize the armed forces and boost “Make in India.”

Nifty Prediction| Market Analysis| Stock Market Tomorrow| Support and Resistance Levels| Gap Up Strategy

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