Market Wrap

Indian equity markets kicked off the new year on a mildly positive but restrained note. After a higher opening, the Nifty spent most of the session moving sideways within a tight 50-point band, reflecting a lack of aggressive follow-through buying. The index eventually closed with marginal gains, remaining below the 26,150 level, as investors adopted a wait-and-watch approach at the start of the calendar year.

Sectorally, Nifty IT emerged as the clear outperformer, staging a sharp technical rebound after six consecutive sessions of decline. The index formed a bullish engulfing pattern near a key support zone, while several heavyweight IT stocks posted strong reversals hinting at a possible resumption of the sector’s broader uptrend. In contrast, most other sectors traded mixed, mirroring the overall subdued market tone.

Globally, cues remained muted as several major international markets were shut for the New Year holiday, resulting in thin trading volumes. On the domestic front, easing inflation trends and steady growth expectations continued to offer a degree of comfort, enabling selective buying despite the absence of strong triggers.

What's Ahead

With global markets reopening, volatility is likely to increase in the coming sessions. Investor focus will gradually shift to overseas cues from the US and Europe, early positioning ahead of the Q3 earnings season, and sectoral leadership signals particularly from IT and banking stocks, which are showing early signs of strength. While the broader indices may continue to consolidate in the near term, stock-specific action is expected to dominate, with investors favoring names that offer strong earnings visibility and clear technical support.

Market Snapshots

Institiutional Activity

Sectoral Performance

Technical Outlook

Nifty 50

The NIFTY 50 continues to trade in a consolidation phase, closing marginally higher at 26,146.55 amid a lack of fresh triggers and mixed sectoral performance. The index remains range-bound, with stock-specific action driving intraday moves, while sharp FMCG weakness offset gains in auto and IT names. Technically, the RSI hovering near the 60 mark suggests mildly positive momentum but not strong enough to signal a decisive breakout. As long as the index holds above the immediate support zone of 26,021–25,947, the broader structure remains constructive, though upside may stay capped near the resistance band of 26,262–26,336 unless volumes improve and leadership broadens.

Bank Nifty

BANK NIFTY maintained its upward bias, closing at 59,711.55 and sustaining above its 20-day EMA, which indicates improving short-term strength. The RSI moving above 60 reflects strengthening bullish momentum, supported by selective buying in PSU and private banks. However, muted participation from heavyweight banks is limiting aggressive upside. On the downside, supports at 59,463 and 59,309 are crucial to preserve the current uptrend, while a decisive move above 59,960 could open the door for a test of the psychological 60,114 zone in the near term.

Nifty Financial Services

The NIFTY Financial Services index ended higher at 27,666.80, extending its gradual recovery, led by NBFCs and select financial stocks. The index structure remains stable, with higher lows indicating underlying buying interest despite intermittent profit-taking in large financial names. As long as FINNIFTY holds above the immediate support band of 27,512–27,429, the near-term outlook stays positive. A sustained move above the resistance zone of 27,781–27,864 would be required to confirm further upside momentum, failing which the index may continue to consolidate.

Sensex

The BSE SENSEX closed marginally lower at 85,188.60, weighed down by sharp losses in select FMCG and financial heavyweights despite strength in power, capital goods, and IT stocks. Technically, the index is consolidating near record levels, suggesting exhaustion at higher zones rather than outright weakness. The support area of 84,855–84,636 remains critical to maintain the medium-term bullish structure, while immediate resistance lies at 85,563–85,782. A breakout beyond this resistance band could revive upside momentum, whereas a breach of support may invite short-term corrective pressure.