Mid-day Mood | Indices recover from early losses amid gains in financial stocks, IT sees profit-booking

With recovery in the market, the two benchmarks extended their uptrend to the sixth session.

Equity benchmarks the Sensex and the Nifty recouped early losses to resume the uptrend for a sixth day to trade marginally higher around noon on January 16, helped by gains in financial names such as Bajaj Finance and ICICI Bank.

Around 11.30 am, the Sensex was up 24.73 points, or 0.03 percent, at 73,352.67, and the Nifty was up 6.3 points, or 0.03 percent, at 22,103.80. The market breadth also favoured gainers as about 1,686 shares rose, 1,476 fell and 56 remained unchanged.

The broader market was also positive, as small and midcap stocks continued to seeing buying.

Sectoral trends

The banking pack, private as well as public banks, shrugged off early jitters to inch higher. Other sectors like automobile, FMCG, infra and metals also traded in the green.

Information technology names, which help push the benchmarks to new highs the previous day, were the top losers as investors rushed to book profits after recent gains. Pharma stocks, too, fell prey to profit booking.

Fundamental view

"The Nifty is now up three times from the Covid low of 7,511, hit in March 2020. This is an indication of a strong bull market and it has a long way to go," said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

He, however, said the rally would not be smooth and sharp corrections were likely since valuations were high.

Geopolitical developments could trigger corrections but recent events like the Israel-Gaza war didn’t impact crude prices or markets. "Similarly, the skirmishes going on in the Red Sea also may pass without hurting the markets. But there can be a near-term concern that the conflict may widen," he said. He advised investors to remain watchful of the events unfolding in the Red Sea region.

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Technical view

"The trend is strong and one can adopt buy-on-dips strategy for the target of 22,330. Bank Nifty is also on the verge of giving a positive breakout, so investors should keep an eye on the sector," said Aditya Gaggar, Director of Progressive Shares.

Mandar Bhojane, Research Analyst at Choice Broking, said the daily timeframe of Nifty showed a bullish pattern with a long lower shadow, suggesting buying interest at lower levels.

"This pattern indicates a bullish momentum in the index, and there is anticipation that the Nifty could reach 22,300 in the coming sessions, particularly with the ongoing earnings season progressing into the second week," he said.

The immediate support for the index was at 21,800 and resistance at 22,300 and 22,500, he said.

Key Nifty gainers

Titan Co, BPCL, Hero MotoCorp, ONGC, Maruti Suzuki

Key Nifty losers

HCLTech, Wipro, LTIMindtree, Divi's Lab, NTPC

Key Sensex gainers

Titan Co, Tata Motors, Maruti Suzuki

Key Sensex losers

HCLTech, Wipro, Tech Mahindra

Stock moves

Angel One: The stock plummeted nearly 10 percent in the opening trade, a day after the broking company reported a sharp margin contraction in the December quarter. Operating margin slumped to 37.60 percent, down from 43.3 percent in the year-ago period. Brokerage firm Motilal Oswal Financial Services attributed higher operational expenditure due to increased client acquisition as the major drag on profitability.

Shakti Pumps (India): The share gained 2 percent as the board of directors will meet on January 18 to review a proposal to raise funds through qualified institutional placements (QIP). The board will consider raising funds through issuing securities by way of preferential allotment or private placement, including one or more qualified institutional placements (QIP) or further public issue of equity shares, the company has said.

Aster DM Healthcare: Shares jumped 12 percent as the stake sale of its Gulf Cooperation Council (GCC) business to Alpha GCC Holdings nears completion. In 2023, the Dubai-based Aster DM Healthcare had approved the sale of its business in the GCC region to Alpha GCC Holdings for $1.01 billion. Of this, $903 million will be received at the closing of the deal and the rest will depend on the fulfillment of certain conditions.

Also Read | Sensex, Nifty snaps 6-day winning streak on profit-booking but no 'trend reversal' yet

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