Index Observation for 2nd Feb. 2026

Index Observation Nifty ended close to 500 pts lower yesterday after the Budget Speech spooked market on an increased STT on derivatives in India. Given the price action on the index Nifty witnessed a 900 pts swing from its intraday peak to panic lows near 24500. Along with other leading indices, Nifty as well has closed below its 200 DMA again as well as at a fresh 4 month closing low. A pressure on USD/INR can further allow an already weak sentiment to weaken further allow a retest and break of yesterday’s low once again. 25200-25250 could now act as fresh supply zone for now. Bank Nifty marginally outperformed Nifty however the intraday swing was in sync with the broader index. Bank Nifty as well witnessed a 2000 pt swing during the budget speech. Index is likely to test yesterday’s low again before find initial ground between 57500-57800 odd. Nifty’s weekly expiry is scheduled for tomorrow while BSE Sensex weekly expiry is scheduled for coming Thursday. Interesting Observation Last week, we highlighted an important development in the Bank Nifty vs Nifty ratio, where the weekly chart was approaching a critical resistance zone. We also noted that the weekly close from Sunday’s special budget session would be pivotal in determining the next directional bias. That candle has now closed in the red, with the ratio failing to decisively overcome resistance. While Bank Nifty has consistently outperformed Nifty over the past five months, this rejection signals a potential pause in relative outperformance. Until a clear breakout above the resistance zone is achieved, Bank Nifty’s outperformance is likely to pause. DERIVATIVES | Trade Setup Cash Market Activity FII: ₹ -588 crore DII: ₹ -682 crore Week-to-Date (WTD) FII: ₹ -1318 crore DII: ₹ 13, 714 crore Month-to-Date (MTD) FII: ₹ -588 crore DII: ₹ -682 crore F& O Cues FII stance on index futures were neutral yesterday. They have added 9k short contracts. Their net position on index futures stands at 203k short contracts. In the options segment, the 24600 strike to act as support, while the 25400 strike remains a key resistance.