Sensex Gain 1,397 Points, Nifty at 23,739; Tomorrow Nifty Prediction
Tomorrow Nifty Prediction
Stock Market Review: February 4 – Bullish Momentum Continues, What’s Ahead for February 5
The Indian stock market closed on a positive note on February 4, showing impressive gains after a slight dip in the previous trading session.
Both Nifty and Bank Nifty managed to maintain their strength by protecting key moving averages and critical support levels, such as the 20-day and 50-day moving averages.
This demonstrates the resilience of the market despite global uncertainties, making investors optimistic about the short-term outlook.
Market Performance: Solid Gains Across the Board
On February 4, the Indian equity indices saw strong gains, reinforcing the bullish sentiment in the market.
The Nifty ended the day above the important 23,700 level, closing at 23,739.25, which marked a rise of 378.20 points or 1.62%. Similarly, the BSE Sensex surged by a significant 1,397.07 points, or 1.81%, closing at 78,583.81.
The market breadth was largely positive, with 2,426 stocks seeing gains, 1,349 stocks registering declines, and 144 stocks remaining unchanged.
This indicates a broad-based rally, suggesting that investors were actively engaging with stocks across various sectors.
Sectoral Performance: Broad-Based Strength with FMCG Underperforming
Sectoral performance on February 4 was largely positive, with all indices closing higher except for FMCG. Among the top-performing sectors, the Nifty PSU Bank,
Infrastructure, Energy, and Oil & Gas indices stood out, each recording substantial gains of 2% or more. These sectors are benefiting from both domestic economic recovery and favorable global trends.
The Nifty Midcap index posted a gain of 1.6%, signaling strong performance in mid-cap stocks, while the Smallcap index registered a 1% increase, suggesting that investor interest is not just limited to large-cap stocks but is also extending to smaller companies with growth potential. This reflects a healthy risk-on sentiment in the market.
Top Performers and Lagging Stocks: Winners and Losers of the Day
Among the top gainers on Nifty, Shriram Finance, L&T, Adani Ports, Bharat Electronics, and IndusInd Bank stood out, benefiting from positive investor sentiment and strong earnings reports.
These stocks are seen as strong bets in both the long-term and short-term, and their performance helped push the broader indices higher.
On the other hand, stocks like Trent, Britannia Industries, Hero MotoCorp, Nestle India, and Eicher Motors underperformed, reflecting some sector-specific weaknesses.
For example, Hero MotoCorp, which is exposed to the cyclical nature of the automobile industry, may have faced some headwinds from slower demand.
Similarly, Nestle India, a FMCG giant, was impacted by a slowdown in consumer spending, which was one of the main reasons why the FMCG sector lagged behind the broader market.
Global Factors and Volatility Risks: Uncertainty Lurking in the Background
Aditya Gaggar, Director at Progressive Shares, noted that Nifty’s strong performance can largely be attributed to favorable global trends.
Despite the volatility seen in global markets, particularly from the US, the Indian market has shown resilience.
According to Gaggar, Nifty’s ability to maintain gains and close at 23,739.25 — its highest level of the day — shows that the Indian market is not overly dependent on external market movements but instead is supported by strong domestic fundamentals.
While the broader market remains in a bullish phase, it is crucial to remain cautious about external uncertainties.
For instance, geopolitical tensions or inconsistent statements from influential figures like former US President Donald Trump, particularly regarding trade tariffs, could bring volatility to global equity markets.
Investors should remain alert to such developments as they could influence market behavior in both the short and medium term.
In the current environment, where global markets are showing some volatility, particularly due to concerns over trade tariffs and rising inflation, the direction of the market could change quickly.
However, if global trade tensions are resolved, it is likely that market sentiment will stabilize, focusing instead on the recovery in corporate earnings and economic growth.
Technical Outlook: Nifty’s Strong Bullish Pattern and Key Levels to Watch
From a technical standpoint, Santosh Meena, Senior Research Analyst at Swastika Investmart, highlighted that the Nifty and Bank Nifty indices managed to hold important support levels during the previous trading session.
Despite an initial decline, both indices successfully defended the crucial 20-day and 50-day moving averages, a key technical support area for the market.
This price action suggests that Nifty has a solid foundation and the potential for further upside in the near future.
According to Meena, the short-term outlook for Nifty remains positive, with the index possibly heading toward 23,800 and eventually targeting the 24,000 mark in the coming sessions.
The ability to sustain above 23,500 is critical, as this level now serves as a major support zone. A break above 24,000 could signal the continuation of the uptrend and may pave the way for further gains.
On the other hand, should the index fall below the support levels of 23,500, it could indicate a reversal of the current bullish momentum.
As such, traders should closely monitor the market for any signs of weakness, especially in the event of external shocks or global economic data releases.
Market Prediction for February 5: Maintaining Optimism Amid Risks
Looking ahead to February 5, the market is expected to remain relatively stable unless major global or domestic events trigger volatility.
The performance of Nifty and other key indices will likely continue to be driven by domestic economic data, earnings reports, and global developments such as trade negotiations or central bank policies.
While the market’s technical outlook is bullish in the short term, investors should remain cautious and prepared for potential market corrections.
Global political developments, especially relating to trade and tariffs, are likely to continue influencing investor sentiment, and any major disruptions could bring volatility to Indian stocks as well.
The next few sessions will also provide valuable insight into how corporate earnings are performing. As earnings season progresses, companies that report strong financial results could provide a boost to the broader market, while those with weaker-than-expected earnings could weigh on investor sentiment.
Final Remarks: What Investors Should Watch
As the market closes on a positive note, the key takeaway is that Nifty has formed a strong bullish pattern by crossing the critical 23,500 level, and this support should hold for the near future.
The index is now likely to test the 24,000 resistance level. However, investors should be mindful of the risks associated with global volatility and stay attuned to corporate earnings and macroeconomic factors.
Key Levels to Watch:
- Support: 23,500
- Resistance: 24,000
Investors should monitor developments in both domestic and global markets closely, as these will have a direct impact on market trends.
As long as geopolitical risks remain manageable and corporate earnings continue to show strength, the Indian stock market should maintain its bullish momentum through February.
