Indian equity benchmarks extended their losing streak into a fifth straight session on Friday, January 9, closing sharply lower as a cocktail of global and domestic concerns soured investor sentiment. The sell-off was driven by renewed fears of aggressive US tariffs, persistent foreign fund outflows, and caution ahead of the third-quarter earnings season.
Market Plunge: Key Indices in the Red
The frontline indices witnessed a broad-based decline. The Sensex tumbled 605 points, or 0.72%, to settle at 83,576.24. Similarly, the Nifty 50 slipped 194 points, or 0.75%, to finish the day at 25,683.30. The pain was not confined to large caps; broader markets also faced significant pressure. The BSE Midcap index declined by 0.90%, while the Smallcap index saw a steeper fall of 1.74%.
Ganesh Dongre, Senior Manager of Technical Research at Anand Rathi, attributed the week's weakness to a major global development. "The benchmark Nifty 50 began the first week of 2026 with sharp profit booking following statements from the Trump administration proposing a steep 500% tariff on countries purchasing oil from Russia," he said. This announcement triggered negative sentiment across global markets, leading the Nifty to close the week down by 2.45% with selling pressure across most major sectors.
Technical Outlook and Key Levels for Next Week
Nifty 50 Analysis
According to Dongre, the market is approaching a critical support zone that could determine the near-term direction. He identified fresh breakout support in the 25,500–25,600 range, suggesting the possibility of a technical rebound in the coming week. "With midcaps and Bank Nifty also holding key support levels, a bounce towards the psychologically important 26,000–26,200 zone cannot be ruled out," he added.
However, he advised caution due to the prevailing uncertainty. "Given the prevailing uncertainty around tariff-related developments, traders should remain cautious on higher levels until clarity emerges," Dongre stated. He placed immediate resistance for the Nifty in the 26,300–26,500 band, where supply pressure is expected to cap any near-term upside.
Derivatives data paints a picture of a range-bound market with defined boundaries. The highest Call open interest is concentrated around the 26,200–26,300 strikes, indicating strong resistance. Conversely, heavy Put open interest at the 25,500–25,600 strikes highlights a well-defined support base. Dongre suggested that any move towards this support zone is likely to attract buying interest, presenting stock-specific accumulation opportunities rather than signaling a broad market reversal.
Bank Nifty Perspective
The banking index mirrored the profit booking but managed to hold crucial support. "Bank Nifty has also seen profit booking but continues to hold its major support near the 59,000 mark," Dongre noted. Technically, it remains above the crucial 58,500–59,000 support band, keeping the broader structure intact. Resistance is seen in the 60,000–60,500 zone, with a stronger hurdle near 61,000.
Dongre summarized the overall outlook as positive to constructive as long as Nifty sustains above 25,600 and Bank Nifty above 58,000. While near-term resistance may limit immediate gains, the prevailing structure favors a buy-on-dips strategy. He advised traders to stay selective, focus on strong sectors, and monitor global geopolitical cues for clearer directional triggers.
Weekly Stock Recommendations from an Analyst
Ganesh Dongre also shared specific trading ideas for the week ahead:
- Infosys: Buy in the range of ₹1600-1620, with a target price of ₹1670 and a stop loss set at ₹1570.
- Dr Reddy's: Buy in the range of ₹1200-1220, with a target price of ₹1260 and a stop loss of ₹1180.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
