Market Rally Continues: Sensex Up by 1,241 Points, Nifty Crosses the 21,700 Threshold.

Market Tumble

Oil & gas, power, and capital goods indexes rose 5%, 3%, and 2%, respectively.

Nifty and Sensex rose about 2 percent each on January 29 after buying across sectors and heavyweights, erasing prior session losses and starting the Budget week strong.

At closure, the Sensex was up 1,240.90 points or 1.76 percent at 71,941.57 and the Nifty was up 385.00 points or 1.80 percent at 21,737.60.

Due to favorable Asian markets, the Indian equity indices opened strong and extended gains as the day went, with Sensex and Nifty reaching 72,000 and 21,750, respectively, before ending near the day’s highs.

Nifty winners were ONGC, Reliance Industries, Adani Enterprises, Coal India, and Adani Ports, while losers included Cipla, ITC, LTIMindtree, Bajaj Auto, and Infosys.

Oil & gas, power, and capital goods are up 5%, 3%, and 2%, respectively.

BSE Smallcap index increased 1% and Midcap index 1.7 percent.

The build-up was long for ONGC, Reliance Industries, and REC, but brief for AU Small Finance Bank, SBI Cards, and United Breweries.

SJVN, Cummins India, Godrej Properties, Indian Bank, Indian Hotels, Infibeam Avenue, IRB Infrastucture, LIC Housing Finance, NBCC (India), NCC, NHPC, ONGC, PNC Infratech, Power Finance, Rain Industries, REC, Shakti Pumps, Shriram Finance, Steel Exchange, Tata Investment Corporation, and others reached 52-week highs on Click for the complete list.

January 30 outlook

Energy companies Reliance and ONGC dominated today’s trade. After starting the week well above 21,500, the Index compounded its gains with follow-through and closed at 21,737.60, up 385 points.

Every sector except FMCG closed the day green, with Energy and PSU Banking leading the way. The Index broke between 21,500 and 21,700 and made a solid bullish candle on the daily chart in one go, although we expect pressure around 21,750.

An Inverted Head & Shoulder design is possible but premature. 21,850 is immediate resistance, while 21,570 protects the downside.

The Nifty trended higher and closed in the green, up ~385 points. On the daily charts, the Nifty has exceeded the swing high of 21750, violating the downtrend’s lower top lower bottom structure. The 40-day average around 21200 supported the Nifty during the collapse and will now act as a lower limit during consolidation.

On the upside, the Index can extend its down towards 21913, the 78.6% fibonacci retracement level of the collapse from 22124 to 21137, and the gap formed on January 17, 2024 in the range 21850–22000 will operate as an immediate hurdle. The daily momentum indicator has a negative crossover, but it has reached the equilibrium line and prices are not weak, suggesting range bound action over the next few trading sessions. We will adjust our Nifty forecast to sideways and expect consolidation between 21200 and 22000.

Bank Nifty is retracing its slide from 48300 to 44500, therefore the pullback could last till 46000–46200. Short-term support is 45110 on the downside.

Indian Market Stocks

Market Movers

Must read book about investing – check here 

All sectoral indices except Nifty realty ended in the red. The financial, pharma, bank, IT, FMCG, and healthcare index fell over 1%.

The Sensex and Nifty fell again as banks and IT sectors fell, FII selling and dwindling chances of US rate cuts weighed on mood.

At closure, the Sensex was down 359.64 points or 0.51 percent at 70,700.67 while the Nifty was down 101.40 points or 0.47 percent at 21,352.60. About 1,813 shares rose, 1,423 fell, and 55 remained unchanged.

Midcap indices retreated, although the Nifty smallcap rose 0.5 percent.

Every sectoral index except Nifty Realty ended in the red. The financial, pharma, bank, IT, FMCG, and healthcare index fell over 1%.

The market will be closed on January 26 for Republic Day.

Analysts attributed the losses to FII selling, WTI oil rise, and fading US rate drop chances.

Watch our market blog for live updates.

Was the fix anticipated?

Due to inflated valuations in most mid- and small-cap equities without fundamental or technical support, a market correction was needed. Tradejini COO Trivesh D expects the correction to last a few more sessions before account-Budget 2024.

Data suggests that the market is negative before the budget, and February has averaged 1.4 percent decline over the last decade. This tendency should continue.

Technical View

The Nifty has support at 21,100 and resistance at 21,400. Vaishali Parekh, vice-president of technical research at Prabhudas Lilladher, said a drop below 21,000 will weaken the trend and investors should expect additional decline.

January derivatives contract expiration and earnings season will keep volatility high.

Market Market Market Market Market

After a shaky start, the Nifty was volatile all day. The index showed hints of reversal on the hourly chart. However, it closed below 21500 resistance. A decisive move above 21500 might boost the index. Downside support is 21400-21350. A breach above 21500 might push the index above 21700.

Markets recovered from Tuesday’s drop and rose about 1% amid turbulence. Initial sentiment was negative, but select heavyweights rebounded to stop the loss and assist the Nifty close in the green. While banking and realty ended weak, metal, energy, and IT performed strongly. The broader indices recovered and gained nearly 1.5 percent each.

Consolidation is possible as the banking index tested its 200 EMA on Wednesday. However, other crucial sectors would struggle to boost Nifty. We recommend stock-specific trading and maintaining positions on both sides.

For Nifty, the immediate resistance is around 22,050 and support at 21,500 and 21,400, Nada added.For Bank Nifty 48,000 is a key obstacle, underlined by strong Call writing. A decisive breakout above the may unleash a rapid short-covering surge. Immediate support is at 47,200-47000, a break of which will probably prompt severe selling pressure, perhaps leading to a fall, he added.