Pre-Budget Rally
Dr Reddy’s Laboratories, Eicher Motors, Sun Pharma, Divis Labs, and Tata Motors were the largest Nifty gainers, while L&T, Titan Company, Tata Consumer, and BPCL lost
Equity benchmarks On January 31, the Sensex and Nifty rose 1% each due to broad purchasing on budget eve and before the US Federal Reserve meeting.
At closure, the Sensex was up 612.21 points, or 0.86 percent, at 71,752.11 and the Nifty was up 203.60 points, or 0.95 percent, at 21,725.70.
Despite mixed global indications, the market started on a down note but recovered to trade higher, with the Nifty crossing 21,700.
Sectors and stocks
L&T, Titan Company, Tata Consumer, and BPCL lost, while Dr Reddy’s Laboratories, Eicher Motors, Sun Pharma, Divis Labs, and Tata Motors gained the most.
Every sectoral index except capital goods ended in the green, with auto, bank, healthcare, power, metal, and realty up 1-2 percent.
The BSE smallcap index rose roughly 2 percent and the midcap index 1.5 percent.
The Nifty closed flat while the Sensex dipped 0.67 percent for the month.
| FII Sold | 1,970.52Â Â Cr |
| DII Bought | 1,002.70Â Cr |
Indian Market Stocks
| Sensex | 612.21 | +0.86% | 71,752.11 |
| Nifty 50 | 203.60 | +0.95% | 21,725.70 |
| Bank Nifty | 629.05 | +1.39% | 45,996.80 |
Market Movers
| Dr Reddys Labs | 280.20 4.80% | Larsen | -149.35 -4.11% |
| Eicher Motors | 134.85 3.64% | Titan Company | -46.25 -1.24% |
| Sun Pharma | 46.70 3.40% | TATA Cons. Prod | -7.80 -0.69% |
| Divis Labs | 118.90 3.35% | BPCL | -1.90 -0.38% |
| Tata Motors | 25.35 2.95% |
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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.
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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.