Sensex Gains 500+ Points, Nifty Crosses 23,250

resr 5paisa Research Team

Last Updated: 23rd January 2025 - 04:35 pm

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On January 23, the benchmark indices, Nifty and Sensex, sustained their gains but remained below their intraday highs. A significant rally in IT and auto stocks contributed to the positive market sentiment. However, weakness in both private and public sector banks prevented a broader surge.

In the wider market, mid and small-cap indices rebounded, recovering by 1.7% and 1.2%, respectively, after experiencing a sharp 2% decline in the previous session. This rebound brought some relief to investors.

"Mid- and small-cap stocks, being high-beta segments, are witnessing sharper corrections. Additionally, mixed earnings in these categories are restricting the strength of rebounds at higher levels," stated Ruchit Jain, Vice President of Technical Research at Motilal Oswal.

As of 12:30 PM IST, the Sensex had risen by 302.04 points (0.40%) to reach 76,707.03, while the Nifty climbed 102.40 points (0.44%) to stand at 23,257.75. Market breadth remained positive, with 2,078 stocks advancing, 1,279 declining, and 121 remaining unchanged.

Two key trends continue to influence the market. Firstly, institutional activity remains steady, with Foreign Institutional Investors (FIIs) persisting in their selling while Domestic Institutional Investors (DIIs) continue their buying spree. Secondly, there is a distinct inclination toward quality stocks, as large-cap companies demonstrate resilience despite the broader market’s volatility. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that with the dollar index and US bond yields staying elevated, FIIs are unlikely to shift to buying, potentially capping the extent of a market rally despite oversold conditions.

Among sectoral indices, the Nifty IT index emerged as a strong performer, advancing over 1%, driven by robust Q3 results and a lack of exposure to Trump-era protectionist tariff measures. Major IT firms such as Infosys, TCS, HCL Tech, Tech Mahindra, Wipro, and Coforge contributed to these gains. Nifty Pharma also gained more than 1%, supported by stocks like Sun Pharma and Cipla. Meanwhile, the Nifty Auto index surged over 1%, led by four-wheeler manufacturers such as M&M, Tata Motors, and Maruti Suzuki. Although the FMCG index initially dropped over 1% in the morning session, it later recouped losses to trade 0.4% higher.

Conversely, the Nifty Bank and PSU Bank indices traded slightly lower, while oil and gas stocks slipped by 0.5%.

Persistent Systems' shares saw a sharp rise of over 10% following the company’s strong financial performance for the December quarter, drawing mixed reactions from analysts. The IT giant reported a consolidated net profit of ₹372.99 crore, reflecting a sequential growth of 15% and a 30% year-on-year increase. Revenue also impressed, climbing 6% QoQ and 23% YoY to ₹3,062.3 crore.

Pidilite Industries’ stock soared 8% following its strong Q3 performance. The company posted a 9% YoY rise in net profit, reaching ₹557 crore, while revenue from operations grew 7.6% to ₹3,368.91 crore. This growth was driven by its Consumer & Bazaar (C&B) and B2B segments.

Shares of Larsen & Toubro (L&T) declined by up to 1% on Thursday, while Mazagon Dock Shipbuilders surged over 5% amid reports that L&T’s bid for India’s ₹70,000 crore P75(I) submarine project had been disqualified. With L&T out of contention, Mazagon Dockyard Ltd (MDL) remains the sole qualifying bidder. The project is part of a major defense initiative aimed at enhancing indigenous manufacturing capabilities.

According to Sameet Chavan, Head of Technical Derivative Research at Angel One, resistance levels are visible at different intervals, with the upper range of 23,300–23,400, near the 20-day exponential moving average (DEMA), acting as an immediate hurdle. He noted that while a definitive recovery cannot yet be confirmed, a breakout above the upper boundary of the falling wedge—currently positioned around 24,000 and aligning above all major moving averages—would be necessary for sustained bullish momentum.

Despite expectations of short-term relief, Chavan cautioned that the market remains uncertain, with volatility persisting due to various factors, including upcoming earnings reports. He pointed out that the key support levels to watch are in the 23,000–22,900 zone, followed by additional support at 22,800–22,700.

Among the top gainers on the Nifty were Wipro, UltraTech Cement, Tech Mahindra, Sun Pharma, and Tata Consumer Products. On the other hand, stocks such as BPCL, Reliance Industries, HUL, SBI, and Dr. Reddy’s were among the notable laggards.

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