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• Breaking their four-day losing streak, equity benchmark indices posted modest gains, driven by strong performances from PSU banks, metal, and auto stocks. Investor sentiment was boosted by a rally in global markets and a drop in domestic inflation to a four-month low. Sensex closed at 76,499, up by 169 points or 0.2%, while the Nifty ended at 23,176, gaining 90 points or 0.4%

• Trading activity shifted to the previously beaten-down small and mid-cap sectors, which surged more than 2% each due to bargain hunting. Among the Nifty sectoral indices, the Nifty PSU Bank index rose the most by 4.2%, followed by the Nifty Metal index, which gained 4%, and the Nifty Auto index, which increased by 2%.

• Positive factors such as a drop in domestic inflation to 5.2%, a six-month high in November IIP, and the RBI Governor's signals of a more flexible rupee contributed to the market's positive momentum.

• Globally, both Asian and European markets gained following reports that the Trump administration would take a more gradual approach to implementing US tariffs.

Technical Outlook:

• Nifty index opened positive and attempted for a pullback move but failed to show follow up buying. It witnessed swings within a band in the first half of the session followed by some consolidation. It formed a Doji sort of candle and an Inside bar on daily frame with longer upper shadow indicating pressure is intact at higher zones. It has been making lower highs from the last eight sessions and wiped off almost 1200 points in this span.

• Now till it holds below 23200 zones, weakness could continue towards 23000 then 22800 zones while hurdles are placed at 23350 then 23500 zones.

Derivative Outlook:

• Nifty future closed positive with gains of 0.51% at 23280 levels. Positive setup seen in Biocon, BSE, Indus towers, Idea, UPL, Escorts, Chola Finance and Zydus Life while weakness in HCL Tech, United Spirits, LTI Mindtree, LTTS, Persistent System, Angel One, Dr. Lal path labs, Lodha, Aollo Hospital, Colpal and Godrej Consumer products.

• On option front, Maximum Call OI is at 23500 then 24000 strike while Maximum Put OI is at 23000 then 22500 strike. Call writing is seen at 23200 then 23400 strike while Put writing is seen at 23200 then 23000 strike. Option data suggests a broader trading range in between 22600 to 23600 zones while an immediate range between 23000 to 23400 levels.

• Government May Allow Stake Sale in Five State-Run Banks: Official - Government may allow the Department of Investment and Public Asset Management to sell stake in five state-run banks including UCO Bank, Central Bank of India and Indian Overseas Bank, according a government official. The stake sale plan also includes Bank of Maharashtra and Punjab and Sind Bank, the official, who asked not to be identified, told reporters in New Delhi.

• HCLTech announces partnerships with Carrix, Microsoft – Company has partnered with Seattle-headquartered Carrix to leverage the former’s advanced suite of AI of Things (AIoT) technology platform. HCLTech’s solutions will help improve the world’s largest marine and rail terminal operator's global port operations.

• RBI Governor Signals He’s Open to More Flexible Rupee - New central bank governor has shown a willingness to allow the rupee to move more freely in tandem with peers in the region while still intervening in the foreign-

• exchange market to curb excessive moves. Reserve Bank of India Governor Sanjay Malhotra, who took office in December, has held multiple meetings with departments at the central bank ahead of his first monetary policy meeting in February. He’s showed keen interest in the RBI’s currency intervention functions and expressed no opposition when his team explained the recent movements in the rupee and the need to allow it to depreciate.

• Kalyan Jewellers – Company’s management denied that income tax authorities conducted search and seize operations at its premises. “I can confirm that there have been no raids at any of our premises,” Ramesh Kalyanaraman, a director at the firm, says in reply to a question by an analyst in a conference call Tuesday

• Tembo Global – Company announced that its Tembo Defence Products will sign an MoU with the Maharashtra Government at the World Economic Forum in Davos.

• WPI inflation rise in December to 2.37%; food prices see decline - Wholesale price index (WPI) based inflation rose to 2.37 per cent in December from 1.89 per cent in November due to the rise in prices of manufactured items and a low base effect. Inflation in food items declined slightly to 8.47 per cent in December from 8.63 per cent in November.

Global Market Update

• European stocks rebounded on Tuesday amid reports that Donald Trump’s administration will take a gradual approach in implementing US tariffs. UK, Germany and France Index gained 1% each.

• Shares in China outperformed their Asian peers, while stocks in Sydney and Taiwan also advanced. Japan Index slipped 1.8%. Both China and Hong Kong Index gained 1.85 and 2.6% respectively. The possibility of gradually-implemented US tariffs is stirring a note of optimism, given that Trump’s threats to impose levies of as much as 60% on Chinese goods have loomed over markets in Asia

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