Market Wrap

Indian equities notched up a second straight day of gains, shrugging off intraday volatility as strong buying in the penultimate hour lifted sentiment decisively. The Nifty50 advanced 0.66% to close near the 25,350 mark, holding firm above key short-term levels.

Broader markets joined the rebound after several sessions of profit booking, with midcap and smallcap stocks recovering smartly. The real outperformance, however, came from CPSE stocks. The CPSE index surged nearly 5%, reflecting aggressive pre-Budget positioning and expectations of continued policy and capex support for public-sector enterprises.

Global cues remained mixed. Overnight, the Dow Jones ended lower while the Nasdaq posted gains, and a similar lack of direction was visible across Asian and European indices. On the domestic macro front, December IIP growth surprised positively at 7.8%—a 26-month high—strengthening the narrative of a resilient growth cycle heading into the Union Budget.

What's Ahead

Markets now enter a high-impact, event-heavy stretch with sentiment hinging on global and domestic policy cues. The US Federal Reserve’s outcome will set the tone for risk appetite, while India’s Economic Survey and the Union Budget over the next two days are likely to drive positioning. With Nifty having closed above the previous day’s high, the near-term bias remains positive, but traders should watch the 25,430–25,500 resistance band closely, with support placed at 25,200–25,250.

With just two sessions left before the Budget, volatility is expected to stay elevated and sector rotation could intensify. Flows may continue toward CPSEs, infrastructure, and capex-linked themes on expectations of policy continuity and government spending support, while broader markets could remain sensitive to headlines and profit-booking at higher levels.

Market Snapshots

Institiutional Activity

Sectoral Performance

Technical Outlook

Nifty 50

Nifty extended its recovery for a second straight session, closing at 25,342.75 after moving within a 185-point intraday range and finishing near the day’s high—an encouraging sign of sustained buying interest. The move was supported by strong traction in defence, metals, CPSE, and select financial names, while broader market breadth remained positive at 32 advances versus 18 declines. Despite the price strength, RSI continues to hover near the 40 mark, suggesting momentum is improving but not yet in overbought territory, leaving room for further upside if follow-through buying emerges. The index has managed to close above the previous day’s high, indicating short-term bullish intent. Immediate supports are placed at 25,045 and 24,860, while resistance is seen at 25,643 and 25,828, where supply pressure may re-emerge.

Bank Nifty

Bank Nifty closed at 59,598.80, gaining 0.66% as PSU and private banking stocks witnessed steady accumulation through the session. The index traded in a relatively narrow band but maintained upward bias throughout the day, reflecting consistent buying interest rather than sharp short covering. RSI has climbed sharply toward the 60 mark, signaling strengthening bullish momentum and a shift in short-term trend in favour of the bulls. Positive breadth (10 advances vs 4 declines) further confirms internal strength within the index. Immediate support is seen at 59,100 and 58,791, while resistance levels stand at 60,098 and 60,406. A sustained move above the 60,100 zone could trigger fresh momentum-led buying.

Nifty Financial Services

The Nifty Financial Services index outperformed, rising 1.02% to close at 27,335.20, driven by strong gains in NBFCs, power financiers, and select lending institutions. The rally indicates sector rotation into rate-sensitive and policy-linked financial counters ahead of key macro events. Market breadth remained robust with 16 advances against 4 declines, highlighting broad participation. The index is gradually building a higher base, and momentum remains constructive as it approaches key resistance levels. Immediate supports are placed at 27,051 and 26,875, while resistance is seen at 27,619 and 27,795. A decisive close above this zone could open room for further upside.

Sensex

Sensex gained 487.20 points to close at 82,344.68, supported by strength in industrials, financials, and select heavyweights, even as a few FMCG and auto names remained under pressure. The positive breadth (22 advances vs 8 declines) and closing near the upper end of the day’s range suggest buying interest is gradually strengthening. The index is attempting to stabilize after recent volatility and is now approaching a key resistance band. Immediate support is placed at 81,531 and 81,047, while resistance levels are seen at 83,097 and 83,581. A breakout above 83,100 would confirm continuation of the recovery trend.