Equity markets are currently navigating a high-voltage phase as they digest the impact of the Union Budget 2026. While the immediate aftermath saw the Nifty 50 and Sensex plunge nearly 2% due to a sharp hike in Securities Transaction Tax (STT), a powerful rebound has since emerged. This recovery was fueled by a historic India-US trade deal, which saw US tariffs on Indian goods slashed from 50% to 18%, injecting a much-needed dose of optimism into the domestic landscape. Institutional flows are showing signs of a pivot. After massive net selling of over ₹43,000 crore in January, foreign institutional investors (FIIs) have transitioned to net buyers in recent sessions. Recent data shows FIIs injecting approximately ₹1,950 crore in a single day, while domestic institutional investors (DIIs) provide a steady cushion. The FII long-short ratio is being closely monitored as negative bets are gradually reduced, though the Put-Call Ratio (PCR) of 1.02 suggests a balanced but still cautious bias. The IT sector remains a significant point of concern and is currently the primary drag on the broader indices. The Nifty IT index recently emerged as the worst-performing sector, falling by nearly 7% in a single week. Heavyweights like TCS and Infosys have faced selling pressure due to global artificial intelligence shifts and growth apprehensions. Technical indicators signal that the sector has entered a consolidation phase, with analysts identifying "make or break" support levels that must hold to prevent further structural decline. Volatility, as measured by the India VIX, remains elevated near the 13–15 level, reflecting a fragile sentiment despite recent gains. The Nifty 50 is currently oscillating within a wide range, with immediate resistance established at 26,000 and critical support at 25,500. A sustained move above the 25,800 mark is required to confirm a positive trend and invite fresh momentum buying. Market participants are now shifting focus to a news-heavy week featuring retail inflation data and a flurry of Q3 earnings reports. While the India-US trade framework has bolstered export prospects, particularly for gems, jewelry, and auto components, the overall market remains event-driven. Investors are maintaining a "wait and watch" approach, prioritizing capital protection as the market attempts to find a stable floor post-budget.