Indian Markets Recover Amid Positive Global Cues and Profit-Taking

The Indian stock markets made a strong comeback on January 7, 2025, after two days of losses, as bullish sentiment returned to the market. The Nifty 50 and Sensex both ended the session in the green, bolstered by positive global cues and the absence of major concerns regarding the HMPV virus. The rally was led by Reliance Industries, ICICI Bank, and HDFC Bank.

Despite the overall market recovery, indices gave up some of their early gains as profit-taking set in, especially towards the end of the session. While the front-line indices experienced this pullback, the broader market still outperformed, especially among smaller stocks.

Market Performance:

• Nifty 50: Gained 0.39%, closing at 23,707.
• Sensex: Rose 0.30%, ending the day at 78,199.
• Nifty Smallcap 100: Jumped 1.35%, closing at 18,673.
• Nifty Midcap 100: Increased 0.89%, settling at 56,869.

This market bounce follows two consecutive days of decline, where both Sensex and Nifty 50 lost more than 2%, primarily driven by sustained foreign institutional investor (FII) selling, which was further fueled by rising US bond yields and concerns about HMPV virus cases in India.

Sectoral Performance:

• Nifty Oil & Gas: Top performer, rising 1.64%.
• Nifty Media, Energy, Metal, CPSE, and Infra: Gained between 0.8% and 1.36%.
• Nifty IT: The only sector that ended lower during the session.

Stock Highlights:

• Kirloskar Brothers: The top performer among Nifty 500 stocks, surging 16% to ₹2,274.
• Other notable gainers included Aegis Logistics, Intellect Design Arena, PTC Industries, Rashtriya Chemicals, Vijaya Diagnostic Center, Biocon, Just Dial, and several others, which ended with gains of over 4%.

Market Outlook:

• Vinod Nair, Head of Research at Geojit Financial Services, stated that despite the market’s partial recovery, it traded within a range due to modest growth expectations and upcoming FY25 GDP estimates. He pointed out that investors are cautious amid sustained FII selling and rising US bond yields.
• In the near term, the market is expected to remain cautious, awaiting earnings recovery in the upcoming result season while also grappling with the effects of strengthening dollar and the uncertainty surrounding rate cuts.

Technical Levels for Nifty 50:

• Resistance: Nifty is expected to face resistance near 23,900, where its 200-Days Simple Moving Average (200-DSMA) is placed.
• Support: The 250-DSMA provides support near 23,500.
• The index is likely to consolidate between 23,500 and 23,900 in the short term, with a breakout from this range determining the next directional move.
• Shrikant Chouhan, Head of Equity Research at Kotak Securities, highlighted that for day traders, key resistance levels are at 23,800 for Nifty and 78,500 for Sensex. A break above these levels could lead to a move towards 23,900-23,950 for Nifty and 78,800-79,000 for Sensex. Conversely, a fall below 23,600 or 77,900 could lead to further selling pressure.

Disclaimer:

The views and recommendations shared above are based on individual analysts’ and experts’ assessments. Traders and investors are advised to conduct their research and consult financial advisors before making decisions.