After two days of losses, the Indian stock market benchmarks, the Sensex and Nifty 50, closed the day higher on January 28 due to robust purchasing in banking and finance firms.
Today's stock market: The benchmarks of the Indian stock market, the Sensex and the Nifty 50, ended their two-day losing streak on Tuesday, January 28, closing in the positive zone.In contrast to its previous closing of 75,366.17, the Sensex began at 75,659 and increased 1,147 points, or 1.5%, to reach an intraday high of 76,512.96. The Nifty 50 soared 309 points, or 1.4%, to 23,137.95 after opening at 22,960.45, up from its previous finish of 22,829.15.
However, both indices reduced their gains. Lastly, the Nifty 50 ended the day at 22,957.25, up 128 points, or 0.56 percent, while the Sensex ended the day 535 points, or 0.71 percent, higher at 75,901.41.
However, the small-cap and mid-cap sectors did not fare well. The BSE Smallcap index ended the day 1.77 percent lower, while the BSE Midcap index ended the day 0.61 percent worse.
Investors lost over ₹1 lakh crore in a single day as the total market capitalization of the BSE-listed companies fell to almost ₹409 lakh crore from ₹410 lakh crore in the previous session due to losses in the mid- and small-cap segments.
Today's sectoral indexes
However, the small-cap and mid-cap sectors did not fare well. The BSE Smallcap index ended the day 1.77 percent lower, while the BSE Midcap index ended the day 0.61 percent worse.
Investors lost over ₹1 lakh crore in a single day as the total market capitalization of the BSE-listed companies fell to almost ₹409 lakh crore from ₹410 lakh crore in the previous session due to losses in the mid- and small-cap segments.
Today's sectoral indexes
The Nifty Bank, PSU Bank, Private Bank, and Financial Services indexes all increased by almost 2%, while the Nifty Realty index surged by more than 2%. The Nifty Auto index increased by more than 1%.
Among the losers, the Nifty Media index fell more than 1% and Nifty Pharma fell more than 2%.
What caused today's gains in the Indian stock market?
The market was driven higher by the following five variables, according to experts. Let's examine:
1. Increases in major banks
The market was strongly boosted by banking and financial companies, which are heavily weighted in the benchmark indices.
The leading contributors to the advances in the Sensex and the Nifty 50 were HDFC Bank, ICICI Bank, Axis Bank, and Bajaj Finance.
Following the Reserve Bank of India's (RBI) announcement of a series of money market and currency measures that will eventually inject ₹1.5 trillion, the Nifty Bank and Nifty Financial Services indexes surged by about 2%.
The RBI said that it would use open market operations (OMOs) to buy ₹60,000 crore worth of government securities (G-Secs) in three tranches of ₹20,000 crore each. The dates of the OMO auctions are January 30 and February 13 and 20.
2. Rebound in a market that is oversold
Among the losers, the Nifty Media index fell more than 1% and Nifty Pharma fell more than 2%.
What caused today's gains in the Indian stock market?
The market was driven higher by the following five variables, according to experts. Let's examine:
1. Increases in major banks
The market was strongly boosted by banking and financial companies, which are heavily weighted in the benchmark indices.
The leading contributors to the advances in the Sensex and the Nifty 50 were HDFC Bank, ICICI Bank, Axis Bank, and Bajaj Finance.
Following the Reserve Bank of India's (RBI) announcement of a series of money market and currency measures that will eventually inject ₹1.5 trillion, the Nifty Bank and Nifty Financial Services indexes surged by about 2%.
The RBI said that it would use open market operations (OMOs) to buy ₹60,000 crore worth of government securities (G-Secs) in three tranches of ₹20,000 crore each. The dates of the OMO auctions are January 30 and February 13 and 20.
2. Rebound in a market that is oversold
Experts predicted that the market will recover after two losing sessions. Because of the Indian economy's long-term structural growth story, the majority of analysts think that the recent decline in the stock market is a chance to purchase high-quality stocks.
As a result of strong investor involvement and strengthening fundamentals, the markets have proven resilient. Strong ROEs, minimal FII holdings, and robust corporate earnings continue to underpin valuations that are not at extremes. The Indian economy's long-term structural growth narrative is expected to outweigh any short-term turbulence," Right Horizons Founder and Fund Manager Anil Rego told Mint.
3. Equitable large-cap stock valuation
The Nifty 50 is currently 12% lower than it was at its peak. Due to the market valuation reaching reasonable levels as a result of this substantial correction, large-cap stocks are now being selectively bought on dips.
"The market is currently trading at fair valuations that are in line with long-term (10-year) averages following the downturn. Investors might take advantage of the chance to purchase high-quality, fundamentally sound stocks. "It's a positive trend that largecaps are outperforming mid- and smallcaps," stated V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
As a result of strong investor involvement and strengthening fundamentals, the markets have proven resilient. Strong ROEs, minimal FII holdings, and robust corporate earnings continue to underpin valuations that are not at extremes. The Indian economy's long-term structural growth narrative is expected to outweigh any short-term turbulence," Right Horizons Founder and Fund Manager Anil Rego told Mint.
3. Equitable large-cap stock valuation
The Nifty 50 is currently 12% lower than it was at its peak. Due to the market valuation reaching reasonable levels as a result of this substantial correction, large-cap stocks are now being selectively bought on dips.
"The market is currently trading at fair valuations that are in line with long-term (10-year) averages following the downturn. Investors might take advantage of the chance to purchase high-quality, fundamentally sound stocks. "It's a positive trend that largecaps are outperforming mid- and smallcaps," stated V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
4. The pre-budget rally
On February 1, Finance Minister Nirmala Sitharaman will unveil the Budget 2025, which has investors' attention. There are high expectations that the administration would continue to exercise fiscal restraint and unveil policies to increase economic growth and consumption.
"Reviving demand, growing the economy, and boosting investor confidence will be the main objectives of the Union Budget 2025. It is also anticipated that measures will be used to encourage private investment, such as public-private partnerships and incentives under PLI schemes. "If the fiscal deficit is properly managed, some pro-growth policies and clarity on long-term taxation could stabilize stock market sentiment," SKI Capital Managing Director & CEO Narinder Wadhwa told Mint.
On February 1, Finance Minister Nirmala Sitharaman will unveil the Budget 2025, which has investors' attention. There are high expectations that the administration would continue to exercise fiscal restraint and unveil policies to increase economic growth and consumption.
"Reviving demand, growing the economy, and boosting investor confidence will be the main objectives of the Union Budget 2025. It is also anticipated that measures will be used to encourage private investment, such as public-private partnerships and incentives under PLI schemes. "If the fiscal deficit is properly managed, some pro-growth policies and clarity on long-term taxation could stabilize stock market sentiment," SKI Capital Managing Director & CEO Narinder Wadhwa told Mint.
5. The technical aspect
On hourly charts, the RSI is oversold, and a recovery from the lower range to test the average line was anticipated, according to brokerage firm Reliance Securities.
Kotak Securities' head of equities research, Shrikant Chouhan, believes that the Nifty 50 may find significant support between 22,800 and 22,750.
"The market may reach 22,600 levels if selling pressure increases and the Nifty 50 drops below 22,750. Reducing weak long positions between 23,000 and 23,050 levels should be the strategy. But if the index drops to 22,600 over the week, we should try to purchase a few stocks with a medium- to long-term outlook," Chouhan stated.
On hourly charts, the RSI is oversold, and a recovery from the lower range to test the average line was anticipated, according to brokerage firm Reliance Securities.
Kotak Securities' head of equities research, Shrikant Chouhan, believes that the Nifty 50 may find significant support between 22,800 and 22,750.
"The market may reach 22,600 levels if selling pressure increases and the Nifty 50 drops below 22,750. Reducing weak long positions between 23,000 and 23,050 levels should be the strategy. But if the index drops to 22,600 over the week, we should try to purchase a few stocks with a medium- to long-term outlook," Chouhan stated.
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