IGI Logo

Below the Quote on Weekly Note by Mr. Ajit Mishra - SVP, Research, Religare Broking Ltd

The markets continued their consolidation phase, shedding nearly a percent as the corrective trend persisted. Persistent selling by FIIs, mixed corporate earnings, and a sharp rise in crude oil prices dampened investor sentiment. On the brighter side, easing retail inflation and strength in select heavyweight stocks helped limit the pace of the decline. Ultimately, the benchmark indices, Nifty and Sensex, closed at 23,203.2 and 76,619.33, respectively. Sectorally, there was a mixed trend, with metals and energy showing decent gains, while IT stocks plunged sharply due to weak earnings, followed by declines in the realty and FMCG sectors. Interestingly, broader indices displayed resilience amidst the volatility, ending almost flat.

Looking ahead, we anticipate the market to maintain a cautious tone next week due to several domestic and global factors. Key corporate earnings from heavyweights such as Hindustan Unilever, HDFC Bank, ICICI Bank, BPCL, and Hindustan Petroleum are slated for release, which will be closely monitored. Additionally, the swearing-in of US President Donald Trump on January 20 is expected to draw significant attention, especially for any initial announcements on trade tariffs and their implications for global trade.

From a technical perspective, the Nifty has breached its November 2024 low of 23,263.15, facing selling pressure on every recovery attempt. We now expect the index to test the 22,700 level, with minor support at 22,900. On the upside, any rebound is likely to face strong resistance in the 23,500-23,700 zone. Traders are advised to maintain a bearish bias in the index, using recoveries to reduce existing long positions or initiate fresh shorts until clear signs of a reversal emerge.

Amid the prevailing negativity, select stocks in the metal, energy, and PSU sectors are showing buying interest, while others continue to drift lower. It will also be crucial to monitor whether the broader indices, including midcaps and small caps, can sustain their ground. Earnings-related movements are expected to keep traders vigilant. We thus reiterate the importance of prioritizing risk management and maintaining a balanced approach with positions on both sides of the market.

Above views are of the author and not of the website kindly read disclaimer