Indian stock markets staged a measured rebound on Monday, recovering from their sharpest Budget-day decline in six years witnessed during Sunday's special trading session. The benchmark indices, Nifty 50 and Sensex, climbed nearly 0.4% in early trade on February 2, signaling that the initial shock from the Union Budget's proposed changes to Securities Transactions Tax on futures and options trades was beginning to settle.
Market Reaction to STT Hike
The market had plunged close to 2% a day earlier after the Budget unveiled a steep increase in STT on derivatives transactions. The government raised futures STT to 0.05% from the previous 0.02%, while options STT was increased to 0.15% from 0.10/0.125%. This substantial rise in trading costs heavily impacted F&O-focused counters and brokerage stocks, dragging broader indices lower as traders reassessed the profitability of high-frequency derivatives activity.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, commented, "Yesterday's market selloff resulting in a 495-point crash in Nifty was a knee-jerk reaction to the sharp increase in STT on F&O trades. This was not primarily a revenue-raising measure, but a decision to discourage retail traders from complex F&O trading, in which 92% of them were losing money."
He added that while the decision dampened near-term sentiment, the broader Budget framework remained growth-oriented with fiscal prudence, and earnings recovery could gradually become the dominant market theme moving forward.
Technical Stock Picks Amid Volatility
Amid the post-Budget volatility, Anand James, Chief Market Strategist at Geojit Investments, has identified three stocks displaying resilient technical structures despite broader market weakness. According to his analysis, these counters are showing strong support zones, improving momentum indicators, and favorable risk-reward setups.
KAYNES Technology
CMP: ₹3,560 | Stop Loss: ₹3,450 | Target: ₹3,800/4,000
Kaynes Technology continues to trade in a downtrend after breaking below the ₹4,000–4,100 zone and slipping to around ₹3,560. The structure still reflects lower highs and lower lows, with the next downside reference near ₹3,200. However, the weekly chart has formed a bullish reversal candle, and the MACD histogram indicates exhaustion, suggesting that selling pressure may be easing and a technical bounce is possible.
Sentiment may improve after the Union Budget 2026 increased the outlay for the Electronics Components Manufacturing Scheme to ₹40,000 crore and introduced India Semiconductor Mission 2.0, signaling a long-term strategic push for the electronics sector rather than a one-time incentive.
Short-term view:
- Bias: Tactical positive for a rebound toward ₹3,800–4,000 (supply zone).
- Invalidation: A daily close back below ₹3,450–3,480 would negate the bounce and reopen ₹3,200.
Medium-term: Trend repair needs a weekly close above ₹4,000–4,100 with improving breadth/volume; otherwise, rallies may be sold into until a higher swing low forms. Consider buy on dips only while the weekly reversal holds; keep tight stops given the broader downtrend.
ARVIND Limited
CMP: ₹330 | Stop Loss: ₹312 | Target: ₹360-375
Arvind Ltd. is attempting to form a base near ₹330 after a strong rebound, creating higher lows within a multi-month range of ₹305–347. A decisive close above ₹347 would confirm a range breakout and open up ₹360–375, while failure near this zone would keep the stock rotational. On the downside, ₹318–312 remains the immediate support area, followed by a stronger base near ₹305–297.
Momentum is improving, with the RSI rising above 50 into the 60s and the MACD turning up with a contracting negative histogram, indicating early momentum repair and a developing base.
The technical setup is supported by favorable policy tailwinds from the Union Budget 2026, which announced a five-part, sector-wide push for textiles covering:
- National Fibre Scheme
- Textile Expansion & Employment Scheme
- National Handloom & Handicraft Programme
- Text ECON initiative
- SAMARTH 2.0 for skill development
These measures aim to modernize textile clusters, strengthen supply chains, and upgrade workforce capabilities, providing structural medium-term support for integrated textile players like Arvind and reinforcing the stock's constructive bias on confirmed breakouts.
Short-term view:
- Bias: Constructive while above ₹318–312; add on breakout above ₹347 for ₹360/375.
- Invalidation: Daily close below ₹312 shifts bias back to range-bound/weak toward ₹305–297.
RAYMOND Limited
CMP: ₹393 | Stop Loss: ₹370 | Target: ₹440-470
Raymond is showing early signs of a short-term recovery after a steep corrective phase. On the weekly chart, the stock has formed an inverted hammer, a typical bullish reversal pattern after a decline, reflecting rejection of lower levels and fresh buying interest. This suggests that downside pressure may be easing, even though the broader trend remains corrective.
Momentum indicators reinforce this outlook. The MACD histogram shows fading negative bars, signaling weakening selling pressure and the potential for a short-term bounce. Although the MACD line remains below the signal line, the improving histogram points to initial stabilization. The RSI is still subdued but attempting to form a base, aligning with the possibility of a relief rally rather than a full trend reversal.
Short-term view:
- Bias: Constructive while above ₹380–370; add on a breakout above ₹420–440 for ₹470–500.
- Invalidation: A daily close below ₹370 shifts the bias back to corrective/weak, exposing ₹350–330 on the downside.
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.
