Stock Market Outlook, February 3: Sensex, Nifty May Remain Volatile Amid Budget Cues, Global Signals & RBI MPC

Indian equity markets are expected to remain volatile on Tuesday, February 3, as investors continue to digest the finer details of Union Budget 2026, monitor global market cues and position themselves ahead of the Reserve Bank of India's monetary policy outcome. The outlook follows a strong rebound in benchmark indices on February 2, when the Sensex and Nifty recovered sharply from Budget-day losses to end near their intraday highs.

Stock Market Outlook Today, 3 February 2026: Nifty, Sensex Prediction For Tuesday

On Monday, the Sensex jumped 943.52 points, or 1.17 percent, to close at 81,666.46, while the Nifty gained 262.95 points, or 1.06 percent, to settle at 25,088.40. Broader markets also participated in the recovery, with the Nifty Midcap index rising 0.96 percent and the Nifty Smallcap index adding 0.6 percent.

Sectorally, FMCG, auto, metals, oil & gas, energy, infrastructure and realty stocks advanced 1-2 percent, while IT stocks underperformed, with the Nifty IT index slipping around 0.5 percent.

Market Sentiment After Budget 2026

"Indian equity markets staged a strong rebound on Monday, with the Nifty recovering around 400 points from the day's low to settle at 25,088 after a volatile session. The late-session rally came as investors analysed the fine print of Budget 2026," said Siddhartha Khemka, Head of Research, Wealth Management at Motilal Oswal Financial Services.

He added that the Budget was largely in line with expectations and signalled policy continuity rather than aggressive stimulus. "The Finance Minister balanced the imperatives of fiscal consolidation with sustaining growth dynamics, while also seeking to fortify India's business architecture against prevailing geopolitical headwinds," he noted.

Sectoral Trends; Auto, Oil & Gas Stocks in Focus

Auto and oil & gas stocks are expected to remain in focus in the near term. On Monday, the Nifty Auto index gained over 2 percent, supported by strong monthly sales numbers from leading manufacturers. Oil & gas stocks also rose nearly 2 percent, aided by easing crude oil prices and renewed interest in oil marketing companies.

Khemka pointed out that stock-specific action is likely to intensify as the Q3 earnings season gathers pace. Key companies scheduled to announce results include Bajaj Finance, Adani Ports, Varun Beverages and Adani Enterprises. On the macro front, markets will track the S&P Manufacturing PMI data later in the day and US JOLTS job openings data on Tuesday.

Nifty Prediction Today for February 3

Bajaj Broking Research said the Nifty formed a bullish candle on Monday, indicating a pullback after the sharp Budget-day decline, but cautioned that resistance levels remain crucial.

"Immediate resistance is placed at 25,200-25,250 levels, which is the confluence of the 200-day EMA and price parity with the previous up move. Sustaining above this zone will signal a pause in the current downtrend," the brokerage said.

It added that volatility is likely to stay elevated during the week due to global uncertainties and the RBI policy decision. On the upside, short-term resistance is seen at 25,400-25,500 levels, while key support lies at 24,500-24,600, corresponding to the October 2025 lows and the panic low seen during the Budget session.

Bank Nifty Outlook Remains Cautious

Bank Nifty is expected to consolidate with a cautious bias, according to Bajaj Broking Research. The index formed a bullish candle on Monday but remained within the previous session's range, suggesting selective buying.

"Buying demand is emerging from the 58,100-57,800 zone, which is a confluence of the recent low and the 100-day EMA. However, a sustained move below this support could open downside towards 57,000 levels," the brokerage noted.

On the upside, analysts believe a decisive move above 59,000-59,200 will be required to signal a pause in the prevailing downtrend. Elevated volatility is expected to persist, driven by global market cues and the RBI's policy announcement.

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