Indian Stock Market Sees Volatile Week with Strong Nifty 50 Rebound
The Indian stock market navigated a turbulent yet ultimately positive trading week from February 1 to February 6, 2026, characterized by sharp swings in the benchmark Nifty 50 index. This volatility was primarily driven by a confluence of major domestic and international events, including the Union Budget presentation, the announcement of a significant India–US trade deal, global concerns over AI disruption in the tech sector, and the Reserve Bank of India's monetary policy decision.
Market Movements and Key Drivers
The week commenced with a pronounced downturn on Budget Day, as the Nifty 50 index tumbled nearly 2% to approximately 24,825 points. This initial decline was fueled by investor apprehension surrounding new fiscal measures, notably an increased Securities Transaction Tax on futures and options trading, which dampened market sentiment. However, a dramatic reversal unfolded on February 2 and 3 following the confirmation of a landmark India–US trade agreement. This development alleviated fears of potential tariffs under the Trump administration, triggering widespread buying activity that propelled the Nifty 50 index above the 25,700 mark.
Later in the week, profit-taking maneuvers and intense selling pressure on information technology stocks, amid broader global sell-offs linked to artificial intelligence sector anxieties, reintroduced high volatility. Despite these pressures, the Nifty 50 index demonstrated resilience, recovering to conclude the week at 25,693.70. This closing figure represented the index's strongest weekly performance in three months, buoyed by robust gains in the fast-moving consumer goods, realty, metals, and other domestically oriented sectors.
Analyst Outlook on Nifty 50 and Bank Nifty
Mehul Kothari, a senior analyst at Anand Rathi, provided a detailed technical perspective on the market outlook. "After the strong rebound from the 24,500 base zone, the Nifty attempted to sustain above the recent recovery high but encountered significant selling pressure near the 25,900–26,000 resistance zone," Kothari stated. "The index has now entered a short-term corrective and consolidation phase, indicating exhaustion following the sharp post–India-US trade deal rally."
Kothari identified 25,450 as a critical pivot level on the downside. A decisive break below this threshold could potentially initiate a gap-fill movement toward 25,100, followed by a test of the broader demand zone between 24,800 and 24,500, where substantial buying interest is anticipated to re-emerge. He emphasized that as long as this lower band holds, the medium-term market structure remains constructive.
"On the upside, the Nifty is expected to face formidable resistance within the 25,900–26,400 zone, which aligns with recent swing highs and supply pressure," Kothari added. "Only a sustained move above this zone would rejuvenate bullish momentum and signal the commencement of the next directional upside leg. Overall, the index is currently in a range-bound phase, where stock-specific and sector-specific opportunities are likely to outperform the headline index. Traders should adopt a cautious stance near resistance levels and seek buying opportunities primarily near strong support zones, while awaiting a clear breakout or breakdown for the next meaningful trend."
Regarding the Bank Nifty index, Kothari noted it witnessed a sharp rebound from the 58,000 base, extending its rally to establish a fresh high near 61,700, driven by positive sentiment from the India–US trade deal. However, the index has retreated toward the 60,000 zone, facing hesitation at higher levels due to long-term rising trendline resistance. A sustained breakout and fresh momentum would require a decisive move above 62,000, signaling a new uptrend leg.
Kothari indicated the Bank Nifty is likely to remain in a consolidation phase with a neutral-to-positive bias for banking stocks. Immediate support is positioned near 59,000, coinciding with a recent gap area and acting as a crucial short-term demand zone. As long as the Bank Nifty maintains levels above this support, the broader structure stays constructive, though traders are advised to remain selective and await confirmation above resistance before taking aggressive positions.
Stocks to Buy Under ₹100: Analyst Recommendations
In the context of identifying affordable investment opportunities, Mehul Kothari of Anand Rathi recommended three specific stocks trading under ₹100 for consideration.
- IRB Infrastructure Developers: Recommended action is to buy at ₹43, with a target price of ₹48 and a stop loss set at ₹40.50.
- IFCI: Recommended action is to buy at ₹60, with a target price of ₹74 and a stop loss set at ₹53.
- Embassy Developments: Recommended action is to buy at ₹68, with a target price of ₹80 and a stop loss set at ₹62.
Disclaimer: This article is intended for educational purposes only. The views and recommendations expressed herein are those of individual analysts or broking companies and do not represent the stance of Mint or its affiliates. Investors are strongly advised to consult with certified financial experts before making any investment decisions.
