Bulls on the defensive: Technical resistance looms as global cues sour

Peppered by intermittent news flow like escalating geopolitical tensions between the US and Iran, US Supreme Court verdict on tariffs, news from India AI Impact Summit 2026 and spike in international crude oil prices; the stock market remained very volatile and moved in response to mixed news during the week ended.

The Sensex added 187.95 points, or 0.22 per cent, to finish at 82,814.71, while the Nifty rose 100.15 points, or 0.39 per cent, to close at 25,571.25. Mixed trend was seen in the broader market with the BSE Midcap index rising 0.35 per cent but the BSE-Smallcap index shedding 0.5 per cent.

Sectoral performance also remained mixed during the week. The Nifty PSU Bank index rose 5.5 per cent, while the Nifty Energy index gained 2.4 per cent and the Nifty FMCG index added 1.7 per cent. The Nifty Pharma, Healthcare, and Defence indices advanced around 1 per cent each.

However, the Nifty Auto, IT, and Media indices declined between 1.3–2.5 per cent during the period. FIIs extended their selling for the second consecutive week, selling equities worth Rs637.68 crore. DIIs continued their buying streak, purchasing equities worth Rs6,883.81 crore.

However, it is pertinent to observe that FIIs have turned net buyers by buying shares worth Rs 16,912 in February. FIIs have sold heavily in IT stocks due to the Anthropic shock, they were buyers in financial services and capital goods. The Indian rupee snapped its two-week winning streak to settle 34 paise lower at 90.98 against the US dollar.

Precious metals gained support from rising concerns about a possible US-Iran conflict, following Trump’s comments and reports of a larger US military presence in the region.

International crude oil prices surged by over 8 per cent on heightened fears of disruption to the Strait of Hormuz, a key chokepoint handling roughly one-third of global seaborne oil trade. With the Q3FY26 result season now behind us, it is important to step back to assess how market fared in Q3FY26.

Results indicate that revenue growth is stabilising, but profitability remains under pressure. Large caps are showing relatively better breadth and valuation stability, while small caps face slower earnings momentum and multiple compression.

The earnings cycle is not weak, but it is clearly selective. Going ahead, margin recovery and broader profit participation will be key triggers for sustained market strength. Positive sentiment from India’s AI summit supported the market. India is in the midst of a data-centre investment boom.

Money is flowing into the country, but the benefits may prove temporary say industry watchers. US stocks ended the week on a high note after the Supreme Court threw out President Trump’s sweeping tariffs, with all three major indexes logging weekly gains.

But the defiant attitude of President Trump over the weekend to impose 15 per cent tariff on most imports has triggered fresh uncertainty over the recent trade deals signed by USA.

Broader impact of Supreme Court’s tariff ruling and Trump’s upcoming State of the Union address to also remain in focus for investors in the coming week.

Simply seeing that a trend has gone too far or that a particular industry is stagnating seldom produces good returns. To really be different, you have to do something new. New ideas are the best and most profitable way to be a contrarian.

FUTURES & OPTIONS / SECTOR WATCH

News driven heightened volatility triggered sharp moves in both index futures and stock futures in the derivative segment. Nifty (25,571) and Bank Nifty (61,172) gained 0.4 per cent and 1.6 per cent respectively during the week ended. Strong buying in banking stocks especially PSU banks helped the sector outperform the broader market. Both the indices witnessed considerable volatility ahead of the settlement week.

In the options segment, the significant Call open interest for Nifty was observed at the 26,000 and 25,800 strikes level whereas notable Put open interest was concentrated at the 25,000 and 25,500 strikes.

For Bank Nifty, significant Call open interest was seen at the 62,000 strike with substantial Put open interest at the 61,000 strike. Implied volatility (IV) for Nifty’s Call options settled at 11.46 per cent while Put options concluded at 12.35 per cent.

The India VIX, a key indicator of market volatility concluded the week at 13.37 per cent. The Put-Call Ratio Open Interest (PCR OI) stood at 0.55 for the week. The Nifty has corrected from the important resistance zone of 25,800–25,850 a level which the index has failed to cross multiple times in the recent past.

Only a sustained move above 25,800–25,850 could trigger fresh upside momentum. Immediate resistance levels are placed at 26,000 and 26,250, while supports are seen at 25,400 and 25,000.

Rollover data to March series, shows a positive inclination. The probability for a rally is high. Traders are advised to closely track global news and developments between the US and Iran, especially any signs of progress or escalation in diplomatic talks or military activity.

The broader impact of the Supreme Court’s tariff ruling, and Trump’s upcoming State of the Union address will also remain in focus.

Stocks looking good are Adani Green, IRCTC, Patanjali, Marico, Torrent Power and TI India. Stocks looking weak are Aurobindo Pharma, Grasim, Indigo, Persistent Systems, Swiggy and Unominda.

(The author is a senior maket analyst and former vice-chairman, Andhra Pradesh State Planning Board)

STOCK PICKS

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