Benchmark indices Nifty and Sensex crashed on January 21, marking a seven-month low as the sell-off intensified amid massive volatility. Weakness in both public and private sector banks, along with a sharp decline in auto stocks, crushed market sentiment. The small and midcap indices took the hardest hit, plunging further into negative territory, outpacing their large-cap counterparts. In just this session, a staggering Rs 7 lakh crore in market capitalisation has been wiped out, according to exchange data.
Interestingly, the frontline indices reversed all losses to trade in the green on an intraday basis but soon succumbed to selling pressure as a host of global and domestic factors kept market participants on edge.
At close, the Sensex was down 1,235.08 points or 1.60 percent at 75,838.36, and the Nifty was down 320.10 points or 1.37 percent at 23,024.65. About 1,148 shares advanced, 2,656 shares declined, and 112 shares unchanged.
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Experts believe that the market remains in an oversold zone, with the recent bounce seen as a reprieve rather than a sign of a broader recovery. Mixed corporate earnings and persistent FII outflows have left sentiment tepid, with investors awaiting stronger sectoral cues to drive a meaningful uptrend. Banking stocks have shown resilience amid Q3, but the absence of IT sector support limits upside potential. Key earnings from ICICI Bank and HDFC this week are expected to influence market direction.
The broader markets, comprising mid-small cap indices, witnessed steeper cuts in today's session with losses of 2.2 and 2.3 percent, respectively. Experts flag that valuations in the space remain elevated above historical averages, hinting at room for further corrections. A stock-specific approach, focusing on strong fundamentals and earnings visibility is advised over expectations of a broad-based recovery.
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Nifty Bank and PSU Bank indices were the biggest losers, each falling nearly 2 percent. Nifty Metal and Auto stocks followed suit, also declining by 1 percent in the afternoon session. Maruti Suzuki, M&M, Bajaj Auto and Tata Motors dragged the index lower ahead of earnings next week. Nifty Realty suffered the steepest fall, down over 4 percent, led by DLF, Oberoi Realty, and Phoenix. Energy, and Consumer Durables stocks also traded firmly lower, each dipping by over 1 percent.
Dixon Tech shares extended morning losses to tank nearly 14 percent after the company reported a sequential decline in its consolidated net profit and revenue from operations for the quarter ending December. In Q3FY25, Dixon's net profit dropped 47.5 percent year-on-year to Rs 216 crore from Rs 411.7 crore in Q3FY24. Revenue for the quarter declined by over 9 percent to Rs 10,453.7 crore.
In a similar fashion, Zomato stock nosedived over 10 percent after it reported a 57 percent YoY fall in net profit at Rs 59 crore for the October-December quarter. Sequentially, profit was down 66.5 percent. Following this, analysts have cut their earnings estimates, coupled with share price targets for the food delivery and aggregator company.
On the other hand, Apollo Hospitals rallied 2 percent to become the top gainer on the Nifty after Kotak Institutional Equities upgraded the stock from 'Add' to 'Buy'. The brokerage raised the target price on Apollo Hospitals to Rs 8,270 per share as compared to Rs 8,100 per share. Analysts at Kotak believe Apollo Hospitals is better placed on the competitive front given its diversified presence and lower exposure to the three potentially hyper-competitive micro-markets of Delhi NCR.
"The bulls face persistent resistance, with hurdles at regular intervals. In the immediate term, 23,400 serves as a key resistance. A breakout above this could pave the way for an extension of the rally towards 23,700–23,750. That said, a decisive shift in the broader trend would require prices to surpass all major moving averages and breach the descending trendline resistance near 24,000," Sameet Chavan, Head of Technical and Derivative Research at Angel One said.
"On the downside, the intraday low around 23,150 serves as immediate support, followed by stronger support in the 23,000–22,900 zone, aligned with a falling wedge pattern. Traders should monitor these key levels and align their strategies accordingly during what promises to be an eventful week," he added.
Trent, Adani Ports, NTPC, ICICI Bank, and M&M were among the biggest losers on the Nifty, while gainers included Apollo Hospitals, BPCL, Tata Consumer, JSW Steel, and Shriram Finance.
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