Can I use instead at the beginning of the sentence? e.g I did not go there. Instead, I stayed home.
My personal opinion (I claim no teacher's expertise here) - I am happy with your original version. i would probably say, " I did not go there. I stayed home instead". I, personally, don't like bhaisahab's version, but I am not saying that it's wrong.
Context is always important; labelling is rarely important.
You can begin a sentence with anything - including and or but.
Rover