The Indian stock market ended the week on a positive note, with both the Nifty 50 and Sensex posting modest gains. After last week’s sharp declines, driven by foreign investor outflows and global uncertainty, markets have managed to regain some footing.
Weekly Market Performance
- Nifty 50: Closed at 23,813.4, rising 0.27% for the day and gaining 1% for the week.
- Sensex: Ended at 78,699.07, up 0.29% for the day and showing similar weekly gains.
These gains come after a 5% drop last week, marking the sharpest decline in 30 months. This week’s rebound suggests a stabilizing trend, aided by key sector performances and favorable valuations in certain stocks.
Sectoral and Market Insights
1. Banking and Pharma Sectors Lead Recovery
Banking and pharmaceutical stocks were instrumental in offsetting declines in the IT sector, providing the much-needed support to the indices. Analysts see these sectors as safe havens amid volatility.
2. Auto Stocks Gain Traction
Auto stocks staged a recovery this week as investors took advantage of favorable valuations following last week’s steep correction.
3. FII Outflows and Weak Rupee Persist
Foreign Institutional Investors (FIIs) continued to sell off, primarily due to a strengthening US dollar and rising US bond yields, contributing to rupee depreciation. However, the pace of outflows has moderated, providing some reassurance to the market.
Technical Analysis: Nifty 50
- Key Resistance Level: 23,900.
A decisive close above this level could push the Nifty toward 24,400, a critical 61.8% retracement level of its recent decline from 24,857 to 23,537. - Support Level: 23,300.
This support is fortified by the 200-day EMA and the 61.8% retracement level of the June–September rally. Holding above this threshold would demonstrate market strength. - Trading Range: Consolidation is expected in the 23,300–23,900 range if the resistance level isn’t breached.
Market Outlook: Volatility Ahead
According to Dharmesh Shah, Vice President at ICICI Securities, January is likely to witness heightened volatility due to:
- Anticipation of Q3FY25 earnings results.
- Policy measures from the Trump administration.
- Pre-budget expectations and announcements.
Despite this, Nifty holding above the 52-week EMA (around 23,300) signals strength, paving the way for a potential pullback.
Broader Market Trends
The broader market mirrored the benchmark indices, sustaining levels above the 100-day EMA. Analysts expect stock-specific actions to dominate trading, with sector rotation continuing as investors look for opportunities in oversold segments.
Stock to Buy This Week
United Spirits
- Buy Range: ₹1,540–₹1,580.
- Target Price: ₹1,698.
- Stop Loss: ₹1,508.
As markets stabilize, quality stocks like United Spirits offer attractive entry points for investors seeking growth amid volatility.
