Indian Stock Market Stages Impressive Recovery Amid Positive Global Cues
The Indian stock market experienced a significant resurgence on Thursday, January 22, marked by substantial buying activity and short covering following recent declines. This upward movement was primarily driven by positive global indicators suggesting easing geopolitical tensions, which bolstered investor confidence across domestic exchanges.
Key Market Indices Show Strong Gains
Breaking their three-session losing streak, both major indices recorded notable advances. The Sensex climbed 398 points, representing a gain of 0.49%, to close at 82,307.37. Simultaneously, the Nifty 50 index rose by 132 points, or 0.53%, settling at 25,289.90. This recovery reflects renewed optimism among market participants after a period of uncertainty.
Mid and Small-Cap Segments Outperform
Mid and small-cap stocks demonstrated particularly strong performance during the session. The BSE Midcap index surged by 1.28%, while the BSE Smallcap index increased by 1.13%. This outperformance indicates broader market participation beyond just large-cap stocks, suggesting healthy risk appetite among investors.
Substantial Wealth Creation for Investors
The overall market capitalisation of BSE-listed companies witnessed a remarkable increase, rising to approximately ₹459 lakh crore from ₹454 lakh crore in the previous session. This translates to investors becoming richer by about ₹5 lakh crore in a single trading day, highlighting the substantial value created during this market rebound.
Primary Drivers Behind the Market Recovery
Market analysts attribute this recovery to multiple factors. Vinod Nair, Head of Research at Geojit Investments, noted that the domestic market staged a rebound supported by signs of relief following positive remarks from global leaders regarding international relations and trade policies. Specifically, easing tensions between the US and Europe contributed to improved sentiment.
Additionally, optimism surrounding a potential India-US trade deal provided further support to market sentiment. While initial corporate earnings did little to justify current valuation levels, investors remain hopeful about potential upside from robust domestic demand, which may become more evident in upcoming quarterly results.
Sectoral Performance Highlights
Various sectoral indices displayed strong performance during the session:
- Nifty Bank advanced 0.68%
- Financial Services index rose 0.69%
- Nifty Media and PSU Bank indices recorded impressive gains of 2.39% and 2.34% respectively
- Pharmaceutical, Metal, Healthcare, and FMCG indices each jumped more than 1%
Notable Stock Movements
Within the Nifty 50 index, 40 stocks ended higher, with Dr. Reddy's Laboratories leading gainers with a 5.31% increase, followed by Bharat Electronics (BEL) up 3.76%, and Adani Enterprises rising 2.76%. Conversely, Eternal declined 2.47%, SBI Life Insurance Company fell 1.48%, and Titan Company dropped 1.40% among top losers.
Market Breadth and Technical Indicators
The advance-decline ratio remained favorable, with nearly 3,000 stocks advancing against approximately 1,300 declining on the BSE. Furthermore, 69 stocks including Federal Bank, SBI, and Vedanta reached their 52-week highs, while 276 stocks including ITC, Lodha Developers, Kalyan Jewellers India, and Godrej Properties hit 52-week lows.
Shrikant Chouhan, Head of Equity Research at Kotak Securities, provided technical analysis suggesting that 25,150 could serve as a key support level for Nifty, while 25,500 and 25,600 might act as resistance zones. He advised reducing weak long positions between 25,500-25,600 levels.
Volume Leaders and Significant Movers
The most active counters in terms of volume included Tata Silver Exchange Traded Fund with 117.24 crore shares, Vodafone Idea with 53.3 crore shares, and Tata Gold Exchange Traded Fund with 44.56 crore shares. Additionally, 20 stocks such as Bajaj Consumer Care, Rallis India, Physicswallah, and Lotus Chocolate Company jumped over 15% on the BSE.
Market participants are now closely monitoring upcoming economic data releases, including U.S. GDP growth and core inflation figures, as well as the Bank of Japan policy decision, which may provide further direction for global and domestic markets.
