Taking Stock | Sensex rebounds from 7-month lows, Nifty back above 23,150 led by tech stocks

Sectoral performance was mostly negative, with only a few indices showing resilience

Indian benchmark indices, Sensex and Nifty, closed higher on January 22 after a volatile session, rebounding from seven-month lows, driven by strength in technology stocks. However, broader market indices lagged significantly, with midcap and smallcap indices losing over 1 percent.

At the close, the Sensex rose 566 points (0.75 percent) to 76,404, while the Nifty gained 130 points (0.57 percent) to finish at 23,155. Market breadth remained weak, with 1,110 stocks advancing, 2,677 declining, and 107 remaining unchanged.

Analysts believe the Nifty could see further upside if it sustains above the critical 23,000 mark in the coming sessions.

Sectoral performance was mostly negative, with only a few indices showing resilience. Nifty IT, Nifty Pharma, and Bank Nifty posted stable gains, while the Nifty Realty index emerged as the biggest laggard, falling by 4 percent. Over the past month, major realty stocks like Oberoi Realty, Macrotech Developers (Lodha), and Godrej Properties have shed between 20 percent and 23 percent of their market value. Other underperforming indices included Nifty FMCG and Nifty Metal.

Among individual stocks, HDFC Bank shares ended over 1 percent higher, buoyed by positive sentiment following its steady Q3FY25 results. The bank reported a 2 percent year-on-year (YoY) increase in net profit and an 8 percent YoY growth in net interest income.

Outlook for January 23

Vatsal Bhuva, Technical Analyst at LKP Securities

Nifty took support near its previous session low of 22,980 on January 22 and formed a hammer tweezer bottom candlestick on the daily chart, signaling potential recovery toward 23,350 levels after Tuesday's decline. However, sustained bullish momentum will only emerge if Nifty closes above 23,500, where the 21-day EMA is positioned. Until then, a cautious approach is advised. Short-term traders can focus on the 23,000–23,350 range, with 23,000 providing strong support and the 23,350–23,400 zone acting as a key resistance for the index.

Shrikant Chouhan, Head Equity Research, Kotak Securities

Today, the benchmark indices witnessed a recovery from lower levels, with the Nifty ends 131 points higher while the Sensex was up by 567 points. Among sectors, the IT index gained over 2 percent, whereas the Realty index corrected sharply shed over 4.5 percent. Technically, after the intraday correction, the market found support near 23,000/75,850 and bounced back sharply. However, the short-term trend of the market remains weak.

For day traders, 23,000/75,850 would act as a crucial support zone. If the index stays above this level, the pullback formation is likely to continue. On the higher side, the market could bounce back to the range of 23,250-23,325/76,700-76,900. Conversely, if it falls below 23,000/75,850 the sentiment could change below the same it could decline to 22,900-22,880/75,600-75,500.

Vinod Nair, Head of Research, Geojit Financial Services

The benchmark indices rebounded amidst heightened volatility following better-than-expected results from a major private bank. The IT sector led gains, recovering from recent losses, while mid and small-cap stocks continued to underperform due to valuation concerns. Apart from Banking and IT, most sectors posted losses, with the realty sector being the hardest hit for consecutive days.

The news that the US is considering lower tariffs on China may provide temporary relief, but underlying concerns persist. A moderation in the dollar index could potentially halt rupee depreciation.

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