Sensex, Nifty Sideways On January 22 After Huge 2% Crash; What Is Driving Indian Stock Market On Wednesday?

Stock Market: Indian stock market traded sideways with Sensex regaining its 76,000 mark and Nifty floating around 23,100 levels. However, banking stocks continued to be under pressure. The main drivers of the market are IT stocks, even when the broad-based performance is under selling pressure. Consumer durables, realty, oil & gas, media and metal stocks are in deep red. The performance comes after Sensex and Nifty crashed by 2% each in the previous session, hitting their seven-month lows.

Sensex Price:

At the time of writing, Sensex traded at 76,072.84, higher by 234.48 points or 0.31% on Wednesday. In the early trade, Sensex jumped as much as 442.5 points to hit an intraday high of 76,280.85. Stocks like TCS, Infosys, and Tech Mahindra were top gainers, rising by 2.2% to 2.5%. Stocks like Sun Pharma, M&M, Maruti Suzuki and HCL Tech also contributed to the upside.

However, stocks like Tata Motors, NTPC, SBI, Power Grid, Tata Steel and Zomato remained top bears with a downside of 1% to 2.5%.

Also, Sensex gained despite BSE Sensex Next 50 tumbling by 1,000 points in the trade. Of the total 3,888 stocks listed on BSE, only 902 stocks advanced and 2,839 stocks declined, while 147 stocks were unchanged. The market cap of BSE-listed companies cumulatively stood at Rs 420.07 lakh crore.

Nifty Price:

Nifty 50 traded marginally up by 12.10 points or 0.05% to 23,036.75. In the early deals, the benchmark surged by 119.6 points to hit an intraday high of 23,144.25. Bank Nifty dipped by 245 points. India's volatility index is flat.

However, Nifty Midcap 100 and Nifty Smallcap 100 indexes plunged by more than 2% each. Nifty Realty index continued to nosedive and the latest dip is by 4.5%. Nifty Consumer Durables, Nifty Oil & Gas, Nifty PSU Bank, Nifty Media and Nifty Metal indices tumbled by 1.5% to 2.5%.

Dr. V K Vijayakumar, Chief Investment Strategist, at Geojit Financial Services said, President Trump's orders and announcements, so far, have been disruptive. He is doing tough talking initially to send the message that more stern measures are in the offing. Trump's threat to impose 100% tariffs on BRICS if they attempt dedollarization is a repeat of his election campaign rhetoric. It appears that the markets took this threat too seriously."

Vijayakumar added, Nifty is down around 12% from the 2024 September highs. The correction provides a good opportunity for long-term investors to buy quality stocks, which are now available at fair valuations. The key to success will be patience.

Hardik Matalia, Derivative analyst at Choice Broking said, after a positive opening, Nifty can find support at 22,950 followed by 22,800 and 22,600. On the higher side, 23,100 can be an immediate resistance, followed by 23,250 and 23,400. Also, the Foreign institutional investors (FIIs) extended their selling on the 13th day as they sold equities worth Rs 5,920 crore on January 21, on the other hand, domestic institutionals bought equities worth Rs 3,500 crore on the same day.

Lastly, Matalia said, yesterday, the Indian markets experienced a highly volatile session, with sharp selling pressure dragging the Nifty index to an intraday low below the 23,000 mark. However, the index managed to close near the 23,000 level. Global markets traded on a positive note, while Foreign Institutional Investors (FIIs) remained net sellers, raising concerns about the sustainability of the upward momentum. On the downside, the Nifty could test 22,800, followed by 22,500 levels, as the index continues to face selling pressure from higher levels. A breach below the 23,000 mark should be a concern. On the upside, immediate resistance is at 23,300, with the 23,500 level acting as a significant hurdle. Given the prevailing volatility, traders are advised to exercise caution, implement strict stop-loss strategies, and avoid carrying long positions overnight unless the Nifty index trades above the 23,500 mark to manage risk effectively.