Sensex Gain 631 Points, Nifty at 23,163; Tomorrow Nifty Prediction

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Tomorrow Nifty Prediction

Tomorrow Nifty Prediction

Market Closes with Gains: What to Expect on January 30

Market Recap: The Indian stock market ended the trading session on a positive note on January 29, with both the Nifty and Sensex registering substantial gains.

The market’s rally was largely driven by favorable global cues, including a rise in US markets and the uptrend in European indices.

This global momentum provided a significant boost to domestic investor sentiment, especially as the market prepared for the monthly F&O expiry on Thursday, which added to the ongoing relief rally.

The relief rally, a result of the market being oversold in recent weeks, extended into the second consecutive trading day. Investors took this opportunity to buy into mid and small-cap stocks, which had seen significant selling pressure in recent weeks.

The overall sentiment was further strengthened by the positive technical signals, as key indices showed signs of momentum recovery.

Stock Market Performance:

On January 29, Indian equity indices closed higher, marking a second consecutive day of gains. The Nifty index surged 205.85 points, or 0.90%, to close at 23,163.10, surpassing the crucial 23,150 level.

The Sensex rose 631.55 points, or 0.83%, to end the day at 76,532.96. The breadth of the market was also positive, with 2,874 stocks advancing, 937 declining, and 96 remaining unchanged, reflecting broad-based buying across sectors.

Looking at sectoral performance, the market saw a strong rally across most sectors. Media, capital goods, IT, metals, and realty stocks were the top performers, each gaining between 2-3%.

The auto, banking, pharma, and oil & gas sectors also posted positive returns, rising by 0.5-1.5%. The only sector to experience a decline was FMCG, which ended the day 0.5% lower, indicating a minor correction within the otherwise bullish market sentiment.

Among the broader market indices, the BSE Midcap Index gained 2.5%, while the BSE Smallcap Index rose a significant 3.2%.

This outperformance of mid and small-cap stocks suggested a shift in investor sentiment towards riskier assets, with a growing interest in stocks that had been recently undervalued due to the previous market correction.

Top Gainers and Losers:

The Nifty’s top gainers included stocks such as Shriram Finance, Bharat Electronics, Wipro, Tata Motors, and SBI Life, all of which saw significant upward movement.

These stocks benefited from investor optimism, as market participants sought to capitalize on the post-selloff recovery in mid and small-cap stocks.

On the other hand, stocks like Asian Paints, Maruti Suzuki, BPCL, Britannia Industries, and ITC were among the laggards, with some of these companies facing selling pressure despite the overall market rally.

The FMCG sector, in particular, remained subdued, as investors turned their focus towards higher-growth sectors like IT and Realty, which saw stronger gains on the day.

What’s Next for the Market?

Looking ahead, market participants are closely watching how the market will behave in the coming days, especially with the approaching monthly F&O expiry and the Union Budget announcement set for the following week. Here’s what key market experts have to say about the near-term outlook:

Aditya Gaggar, Director at Progressive Shares, believes that the bulls have shown significant strength, as reflected in the market’s performance on January 29.

He pointed out that Nifty extended its positive momentum, supported by a strong showing from mid and small-cap stocks, which had been under pressure for a while.

Gaggar highlighted that Nifty closed at 23,163.10, with strong technical backing, suggesting further upside potential.

The Relative Strength Index (RSI), a key technical indicator used to identify potential reversal points, has shown a positive divergence, signaling that the market is likely to continue its upward trajectory.

Gaggar noted that Nifty is currently at the brink of breaking out of a falling wedge pattern, a formation that often precedes an upward move.

If Nifty breaks through the 23,200-23,250 range, it could potentially target levels as high as 23,550 in the near term.

Immediate resistance for Nifty is seen around 23,270, and support lies at 23,000, meaning the index could face some challenges before pushing higher.

Traders should keep an eye on these levels, as a decisive break in either direction could set the tone for the coming sessions.

Prashant Tapase, Senior Technical Analyst at Mehta Equities, echoed similar sentiments. He emphasized that the positive sentiment from global markets, particularly the rise in US and European equities, has significantly boosted domestic investor confidence.

Tapase also noted that the ongoing relief rally is likely a continuation of the recent market correction, as the market was in an oversold position.

While mid and small-cap stocks had a strong session, Tapase cautioned that the market may face some headwinds in the form of continued Foreign Institutional Investor (FII) selling.

This trend could continue to weigh on sentiment, especially as global uncertainties persist. Moreover, the Union Budget, expected in the coming days, is another key factor that could introduce volatility into the market.

Key Factors to Watch:

  1. Global Market Trends: The global market rally, especially in the US and European indices, has been a major contributing factor to the domestic market’s optimism. Continued strength in these markets could provide further tailwinds for Indian equities.
  2. Technical Indicators: Watch for Nifty’s movement within the falling wedge formation. A breakout above 23,250 could signal an upward move towards 23,550, while a breakdown below 23,000 could suggest a pullback. Traders should remain vigilant around these levels.
  3. Sectoral Performance: Sectors like IT, media, and realty have shown impressive performance in recent sessions. Investors will likely continue to focus on these growth-oriented sectors, while the FMCG sector may face some headwinds, given its underperformance on January 29.
  4. F&O Expiry and Budget: The monthly F&O expiry on Thursday could trigger some volatility, as traders adjust their positions ahead of the event. Additionally, the Union Budget, which will be presented shortly, will be a crucial factor shaping market sentiment. Expectations around fiscal policies, tax changes, and infrastructure development will likely play a significant role in determining market direction.

Final Remarks:

The Indian stock market has shown resilience, with positive global cues and a strong performance from mid and small-cap stocks driving the rally on January 29.

However, caution is warranted in the near term as several factors, including FII selling, the Union Budget, and technical levels, could introduce volatility.

Traders and investors should keep an eye on key resistance and support levels, as well as sectoral trends, as they navigate the market in the coming days.

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