Market Wrap

Indian equities kicked off the January 2026 series on a confident note, with bulls asserting dominance right from the opening bell. The Nifty50 staged a decisive rebound above its 20-day EMA, snapping its recent losing streak and reclaiming the crucial 26,100 mark an important psychological and technical level.

Market sentiment was clearly supported by strong put writing activity and a sharp cooling in volatility. India VIX slipped 2.09% to 9.48, signaling reduced near-term fear and greater trader confidence. Broader markets continued to outperform, with midcaps extending their year-end momentum, suggesting healthy risk participation beyond frontline indices.

On the global front, Asian markets remained muted amid holiday-thinned volumes, while European equities traded firmly in the green, offering some external comfort. Institutional positioning stayed constructive as investors looked ahead to two key domestic triggers the Union Budget and the upcoming Q3 earnings season both expected to guide market direction in the weeks ahead.

What's Ahead

The near-term setup remains favorable for bulls. Immediate support for the Nifty is placed at 26,080–26,030, while upside resistance is seen at 26,245 and 26,325. The dominance of put writers reflects confidence in higher levels, though volatility could pick up from mid-January as budget expectations and earnings commentary gather pace.

Selective pullbacks from oversold zones may emerge across sectors, particularly in midcaps and smallcaps. Investors will closely track institutional flows, early Q3 results, and global cues once international markets return in full. For now, sentiment supports a continuation of the rally but disciplined, stock-specific positioning will be key as event risk rises.

Market Snapshots

Institiutional Activity

Sectoral Performance

Technical Outlook

Nifty 50

The Nifty 50 continues to trade in a tight consolidation band, ending the session flat near 25,939 amid subdued year-end volumes and mixed sectoral cues. Price action remains range-bound, with the index oscillating between 25,878 and 25,977, reflecting indecision at higher levels. The RSI hovering near the 50 mark reinforces a neutral momentum setup, suggesting neither bulls nor bears have a decisive edge in the near term. As long as the index holds above the 25,812–25,732 support zone, the broader structure remains intact, while a sustained move above 26,068–26,147 would be required to trigger a fresh upside breakout.

Bank Nifty

Bank Nifty displayed relative strength, closing higher at 59,171 and snapping its recent short-term corrective bias. The index managed to reclaim and close above its 20-day EMA, signaling improving momentum after five sessions of consolidation. The RSI has inched higher but remains close to the neutral 50 zone, indicating early signs of stabilization rather than a full-fledged trend reversal. Immediate support is placed at 58,975–58,853, and as long as this zone holds, the index may attempt a move toward the 59,368–59,489 resistance band, where fresh supply could emerge.

Nifty Financial Services

The Nifty Financial Services index continues to grind higher gradually, ending marginally positive at 27,382, supported by selective buying across NBFCs and private lenders. The overall structure remains sideways with a slight positive bias, as reflected in mildly positive market breadth and steady price behavior above key supports. The index is currently consolidating above the 27,249–27,165 support zone, which acts as a short-term floor. A decisive close above 27,517–27,600 would be needed to confirm a continuation of the upward move, failing which the index may remain range-bound.

Sensex

The Sensex ended marginally lower at 84,675, mirroring the broader market’s lack of directional conviction. While buying interest in metals, autos, and select financials provided support, persistent weakness in IT and FMCG capped upside momentum. Technically, the index remains in a consolidation phase near record highs, with no major breakdown signals so far. The immediate support zone of 84,286–84,054 remains crucial to maintain the current structure, while resistance at 85,035–85,267 continues to act as a stiff hurdle. A breakout on either side is likely to dictate the next directional move.