Stock market today: Fag-end buying drives Sensex over 550 points higher, Nifty 50 above 23,150; IT stocks hog limelight

Stock Market Today: Indian markets bounced back sharply in Wednesday’s trading session, January 22, recovering from the sharp sell-off witnessed in the previous session, which had pushed the front-line indices to a 7-month low.

The Nifty 50 ended 130.75 points higher, or with a 0.57% gain, at 23,155, while the BSE Sensex finished the trade at 76,404, up 0.75% or 566 points than Tuesday’s close.

Today’s recovery on Dalal Street was primarily driven by heavyweights such as Infosys, HDFC Bank, and TCS, which saw strong buying momentum during the session. Additionally, pharma stocks supported the rally, helping the markets close higher.

While there was a recovery in large-cap stocks, mid- and small-cap stocks continued to face selling pressure for the second straight session on the back of weak earnings and valuation concerns. The Nifty Midcap 100 index tumbled 1.34% to 53,113, and the Nifty Smallcap 100 index experienced even more selling pressure as it ended with a cut of 1.63% at the 17,172 level.

Meanwhile, the sell-off in EMS stocks extended into today’s trade, with Kaynes Technologies dropping another 11% after a 10% decline in Tuesday’s session. Other stocks in the EMS space, including Dixon Technologies, PG Electroplast, and Amber Enterprises India, fell up to 7% in today’s session.

The once high-flying EMS stocks, which surged with no apparent ceiling, are now facing relentless selling pressure on Dalal Street. Investor sentiment toward the sector appears to have soured as Q3FY25 earnings failed to beat expectations.

Commenting on today’s market performance, “Vinod Nair, Head of Research, Geojit Financial Services said, “The benchmark indices rebounded amidst heightened volatility following better-than-expected results from a major private bank. The IT sector led gains, recovering from recent losses, while mid-and small-cap stocks continued to underperform due to valuation concerns. 

“Apart from banking and IT, most sectors posted losses, with the realty sector being the hardest hit for consecutive days. The news that the US is considering lower tariffs on China may provide temporary relief, but underlying concerns persist. A moderation in the dollar index could potentially halt rupee depreciation,” Vinod Nair stated. 

Sectoral update: IT stocks lead gains, realty stocks decline

IT stocks witnessed strong buying momentum in today’s trade, as President Donald Trump’s push to boost investment in artificial intelligence is expected to benefit Indian IT companies, which derive 50-60% of their revenue from the US.

Trump announced billions of dollars worth of investment on Tuesday to build artificial intelligence infrastructure in the United States. Amid this backdrop, the Nifty IT index jumped 2.14% to 42,590 points.

During Donald Trump’s first term in office, from January 2017 to January 2021, Indian IT stocks experienced a substantial rally. The Nifty IT index delivered a remarkable return of 150%, significantly outpacing the broader Nifty 50, which gained 60% over the same period.

Experts believe that Indian IT firms could benefit from his second term as well, on the back of economic policies, including his proposal of a corporate tax cut, which could boost discretionary spending in the US. The latest results from top US investment banks, such as Goldman Sachs and JP Morgan, also came in above estimates for the December quarter.

Other sectoral indices, such as Nifty Pharma and Nifty Private Bank, ended the session higher with gains of up to 0.70%. On the flip side, Nifty Realty continued to slide for the second straight day, dropping another 4.56% to touch a 10-month low of 865. Today’s drop has caused the index to correct 18% in January so far, marking the biggest monthly drop since March 2020.

Nifty 50: Key levels and trends

Vatsal Bhuva, Technical Analyst at LKP Securities said, “On Wednesday, Nifty took support near its previous session low of 22,980 and formed a hammer tweezer bottom candlestick on the daily chart, signalling potential recovery toward 23,350 levels after Tuesday’s decline.”

“However, sustained bullish momentum will only emerge if Nifty closes above 23,500, where the 21-day EMA is positioned. Until then, a cautious approach is advised. Short-term traders can focus on the 23,000–23,350 range, with 23,000 providing strong support and the 23,350–23,400 zone acting as a key resistance for the index,” he added.

Shrikant Chouhan, Head Equity Research, Kotak Securities said, ” Today, the benchmark indices witnessed a recovery from lower levels, with the Nifty ends 131 points higher while the Sensex was up by 567 points. Technically, after the intraday correction, the market found support near 23000/75850 and bounced back sharply. However, the short-term trend of the market remains weak.”

“For day traders, 23000/75850 would act as a crucial support zone. If the index stays above this level, the pullback formation is likely to continue. On the higher side, the market could bounce back to the range of 23250-23325/76700-76900. Conversely, if it falls below 23000/75850 the sentiment could change below the same it could decline to 22900-22880/75600-75500,” Shrikant noted.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.