Market Outlook Blog – 27 January 2026

Volatility Persists Ahead of F&O Expiry and Union Budget Indian equity markets remain under pressure despite supportive global cues. Recent sessions have witnessed sharp selling, driven by sustained FII outflows, a weak rupee, and technical breakdowns across major indices. Although global markets are showing resilience, domestic sentiment remains fragile with heightened volatility expected due to monthly F&O expiry and the upcoming Union Budget. Nifty 50 – Technical & Derivatives View The Nifty index failed to sustain early gains and witnessed aggressive selling throughout the session. The index has formed a bearish belt-hold candle on both daily and weekly charts, clearly indicating strong selling pressure at higher levels. Over the last two weeks, Nifty has corrected nearly 1,450 points, confirming a lower-top, lower-bottom structure. Key Levels: Resistance: 25,200 → 25,350 Support: 24,900 → 24,800 As long as Nifty remains below 25,200, further weakness cannot be ruled out. Options Data Highlights: Maximum Call OI: 25,300 & 25,500 Maximum Put OI: 25,000 & 24,800 Immediate trading range: 24,900 – 25,300 Broader range: 24,800 – 25,600 Put-Call Ratio has declined, reflecting cautious to bearish sentiment. Sensex – Trend Overview The Sensex showed limited strength in the first half but succumbed to selling pressure later in the session. Every minor pullback was met with fresh selling, indicating bearish dominance. Key Levels: Resistance: 81,800 → 82,200 Support: 81,300 → 81,000 The broader trend remains negative unless the index reclaims key resistance levels. Bank Nifty – Sector Under Pressure Bank Nifty failed to hold above crucial levels and closed below its 50-day EMA, forming a large bearish candle on both daily and weekly charts. This marks the lowest weekly close in nearly nine weeks. Key Levels: Resistance: 58,750 → 59,000 Support: 58,250 → 58,000 Derivatives data suggests consolidation with a negative bias. Sectoral Outlook Positive Bias Sectors: Metals – Supported by rising base metal prices Textiles & Apparel – Hope of India–Europe trade agreement PSU Banks – Strong quarterly performance Defence – Expectations of higher budget allocation Pharma & Export-Oriented Sectors – Beneficiaries of trade agreements Weak to Cautious Sectors: Fintech & Digital Payments Real Estate Aviation IT Midcaps Energy & Power Utilities Global Market Snapshot US Markets: Closed higher ahead of the Federal Reserve policy decision Asian Markets: Trading flat to positive European Markets: Mild gains led by metal stocks Gold: Strong uptrend amid geopolitical risks Crude Oil: Stable with demand concerns Rupee: Slipped to a fresh record low against the US Dollar Institutional Activity FIIs: Net sellers (strong monthly outflow continues) DIIs: Net buyers, partially cushioning the fall Persistent FII selling remains a major overhang for the market. Key Events to Watch Monthly F&O expiry US Federal Reserve interest rate decision Union Budget announcement Developments around India–Europe trade discussions Rupee–Dollar movement Ongoing Q3 earnings season Market View Summary While global cues and trade optimism offer some support, technical weakness and FII selling dominate the near-term trend. A short-term bounce is possible, but unless key resistance levels are reclaimed, the broader bias remains cautious to bearish. Traders are advised to stay disciplined, focus on risk management, and prefer sector-based opportunities over aggressive index positions during this volatile phase. Disclaimer This blog is for educational and informational purposes only. We are not SEBI registered investment advisors. The views expressed are personal market opinions based on technical and derivative data. Stock market investments are subject to market risks. Readers are advised to consult their financial advisor before making any investment or trading decisions. Past performance is not indicative of future results.