Mumbai, India – Indian stock markets closed sharply in the red on the special trading session on Sunday after the Union Budget 2026-27, with the Nifty 50 settling around 24,825, down close to 2% due to increased selling pressure after the announcement by the Finance Ministry.
The sharp sell-off was primarily led by the rise in Securities Transaction Tax (STT) on derivatives, with futures STT hiked from 0.02% to 0.05% and options STT to 0.15%. This step, which is expected to reduce speculative trading, has come as a surprise to market participants.
Technical Analysis: Bears Continue to Hold an Edge
As per technical analysts, the Nifty has moved below the key support levels on the daily chart:
Resistance levels: 25,000-25,150
Immediate support levels: 24,571 and 24,337
Weaker support levels: around 24,500-24,400, in case of further selling pressure
Market analysts point out that a long bear candle with a lower shadow has formed, which is a bearish indication in technical analysis and indicates that the downtrend may continue unless strong buying support emerges at lower levels.
Budget Impact Still Impacting Markets
The trading and brokerage communities are still trying to make sense of the implications of the Budget’s STT increase and other Budget announcements. Some analysts think that the increase in trading costs may impact market liquidity and short-term derivative business.
But there are also positive voices that are being heard, citing long-term structural changes and cyclical earnings growth as reasons to feel more optimistic about the overall market scenario – although this is likely to happen over a period of time.
What Traders Are Watching Monday
With volatility running high – the India VIX has surged, indicating high fear levels – traders will be closely watching:
Levels of support at 24,500-24,400 (critical for short-term breakdown)
Levels of resistance at 25,000-25,150 (vital for a short-term reversal)
International trends and flows, including FPI trends and macroeconomic announcements
Short-term traders are advised to strictly follow level-based trading and be extremely cautious about risk management until unambiguous trading signals emerge.
Disclaimer:
The article is for information purposes only and represents market views at the time of writing. It is not intended as financial advice.
