Sensex closes 350 pts higher from day's low, Nifty ends above 25,550: Three reasons behind markets trimming losses

Sensex closes 350 pts higher from day's low, Nifty ends above 25,550: Three reasons behind markets trimming losses

• Sensex and Nifty recovered after hitting new lows, aided by value buying.
• Metal shares rebounded as markets priced in higher metal prices.
• Optimism over India-EU FTA boosted export sectors and market sentiment.

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Benchmark indices Sensex and Nifty posted partial recovery on January 19 as value buying emerged after the indices hit another low in 2026 earlier in the day.

At 3:30 pm, the Sensex closed 324.17 points or 0.39 percent lower at 83,246.18, and the Nifty ended 108.85 points or 0.42 percent lower at 25,585.5. Sensex hit intraday low of 82,900 while Nifty fell as low as 25,494.

Among the top gainers on Nifty were IndiGo, Tech Mahindra, Bajaj Finance, Kotak Mahindra Bank, Hindustan Unilever while capital goods, FMCG, metal sectors were trading in green.

All the broader indices closed in the red, with the Nifty smallcap index down around 1%. Fall in the shares of Aster DM Healthcare contributed to the fall of both the Nifty Smallcap 50 and Nifty Smallcap 100. The stock was down nearly 4%.

Hitachi Energy India was the top gainer in the Nifty 200 index. The stock was up 5%. Jindal Saw was the top gainer among the Nifty 500 constituents. The stock was up over 16%. The stock rose despite the company reporting an over 52% on-year fall in its net profit for the December quarter to Rs 227 crore. However, sequentially, the company's bottom line jumped up threefold. The stock hit a one-month high of Rs 182.

Among the sectoral indices, Nifty Realty was the worst hit by falling 2%. A nearly 5% fall in the shares of Godrej Properties weighed on the Nifty Realty index.

Four reasons behind markets paring losses

1) Value buying

With markets hitting newer lows of the new year, value buying emerged on January 19 with markets trading comfortably above day's low. By day close, Sensex rose nearly 350 points from day's low while Nifty ended near the important 25,600 level..

"Long-term investors can utilise the volatility to selectively buy the dips focusing on high quality largecaps which will eventually weather the storm," said VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.

2) Buying in FMCG shares

Renewed buying was seen in FMCG shares on January 19, thus snapping three-day losses. Colgate Palmolive, Hindustan Unilever, Patanjali led the gains on the Nifty FMCG index.

Amid geopolitical tensions, investors could be gravitating towards the defensives and FMCG index is currently trading 13% lower from its 52-week high.

3) Optimism over India-EU FTA

Commerce and Industry Minister Piyush Goyal on Friday said the free trade agreement between India and the 27-nation bloc EU, the negotiations for which are at the last leg, will be the "mother of all deals" the country has signed so far.

The conclusion of talks for the agreement is likely to be announced on January 27.

The President of the European Council, Antonio Luis Santos da Costa, and the President of the European Commission, Ursula von der Leyen, will be on a state visit to India from January 25-27. They are chief guests at the 77th Republic Day celebrations.

Textiles, pharmaceuticals, chemicals, engineering goods, gems and jewellery exports will receive a boost from the free trade agreement between India and the 27-nation European Union, according to exporters.

The industry estimates that with tariffs having been phased out due to the FTA, exports to the EU will double over the next three years, they said.

Technical View

"While the index continues to trade below its 20-day and 50-day EMAs, it remains above the 200-day EMA, thereby keeping the medium-term bias constructive. Immediate resistance is placed at 25,875, followed by 26,000 and 26,100, while key support levels are seen at 25,600 and 25,450. A decisive break below 59,750 could trigger a corrective move toward the 59,550–59,150 zone. On the upside, resistance levels are placed at 60,350, 60,500, and 60,700," said Hitesh Tailor, Technical Research Analyst, Choice Broking.