Indian Stock Market Surges on Global Optimism and Reduced Trade Tensions
Indian equity markets experienced a significant upswing on Thursday, January 22, as favorable global indicators and a mellowed response from US President Donald Trump regarding Greenland invigorated stock market bulls. This positive sentiment led to widespread buying across the Indian equity landscape, resulting in substantial gains for major indices.
Market Performance and Key Drivers
The benchmark Sensex surged more than 850 points, exceeding a 1% increase, and reached an intraday peak of 82,783. Similarly, the Nifty 50 index also climbed over 1%, bouncing back to 25,435. The broader market indices, BSE Midcap and Smallcap, each experienced a rise of nearly 2%, indicating broad-based participation in the rally.
Market analysts highlighted that the reduction in global trade tensions served as a significant catalyst for this surge. The easing of geopolitical concerns contributed to improved investor confidence, fostering a bullish environment. Additionally, data released on Thursday revealed contrasting activities among institutional investors. Domestic institutional investors (DII) were net buyers, purchasing shares valued at ₹4,181.74 crore, while foreign institutional investors (FII/FPI) divested equities amounting to ₹1,680.25 crore.
Technical Analysis and Market Views
Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, provided insights into the Nifty 50's performance. After showing weakness with high volatility on Wednesday, the Nifty 50 witnessed a reasonable bounce back amidst a choppy trend, currently trading higher by 115 points. The index has regained the crucial lower support of the 200-day Exponential Moving Average (EMA) after recently violating it. The overall chart pattern suggests a possible formation of a bottom reversal around the 24,900 levels, pending confirmation. Immediate resistance is placed at 25,500 levels.
Short-Term Stock Recommendations
Nagaraj Shetti of HDFC Securities recommends two stocks for short-term consideration:
- Steel Authority of India Ltd (SAIL): Buy at ₹151.10, with a target of ₹159 and a stoploss at ₹147, within a one-week timeframe. The metal stock has been in a narrow range movement over recent weeks and is currently at the edge of an upside breakout from consolidation at ₹150-152 levels. This could be interpreted as a bullish flag breakout, with the pattern of higher tops and bottoms remaining intact.
- Fortis Healthcare Ltd: Sell at ₹849.25, with a target of ₹805 and a stoploss at ₹875, within a one-week timeframe. The minor bounce back in this hospital stock is likely to be completed soon. The stock price has turned down sharply after forming a new lower top at ₹950 a few weeks ago and is currently undergoing a sharp breakdown of the 200-day EMA at ₹855-850 levels. Negative volume and RSI patterns indicate further weakness ahead.
Disclaimer: The views and recommendations provided in this analysis are those of individual analysts and do not represent the views of Mint. Investors are advised to consult with certified experts before making any investment decisions.
