Infosys, HDFC Bank, and TCS drives Sensex to soar 550+ points, Nifty 50 above 23,150

On January 22, 2025, Indian markets made a strong recovery from the previous day's sharp sell-off, which had pushed the indices to a seven-month low. The Nifty 50 closed 130.75 points higher, up by 0.57%, at 23,155, while the BSE Sensex gained 566 points, or 0.75%, finishing at 76,404.

The market's rebound was driven by major stocks like Infosys, HDFC Bank, and TCS, which experienced strong buying momentum. Pharma stocks also played a role in supporting the rally.

However, mid- and small-cap stocks continued to face selling pressure, with the Nifty Midcap 100 index dropping by 1.34% and the Nifty Smallcap 100 index falling by 1.63%.

The EMS (Electronic Manufacturing Services) sector remained under pressure, with stocks like Kaynes Technologies, Dixon Technologies, and Amber Enterprises seeing declines of up to 11%. These stocks, once high-flyers, have been facing continuous selling, primarily due to weaker-than-expected Q3 earnings.

Vinod Nair, Head of Research at Geojit Financial Services, attributed today's recovery to better-than-expected results from a major private bank, along with gains in IT stocks. Despite this, mid- and small-cap stocks continued to underperform due to valuation concerns. The realty sector was one of the biggest losers, declining for consecutive days.

IT Stocks Shine Amid Global Developments

The IT sector saw significant gains today, particularly after President Donald Trump's announcement to boost investment in artificial intelligence. This is expected to benefit Indian IT companies, which derive a large portion of their revenue from the US. The Nifty IT index surged by 2.14%, reaching 42,590 points.

Indian IT stocks had rallied during Trump's first term (2017-2021), and experts believe that his second term could bring further benefits, particularly through policies such as corporate tax cuts.

Sector Performance

The Nifty Pharma and Nifty Private Bank indices ended the day in the green, with gains up to 0.70%. On the other hand, the Nifty Realty index continued its downward slide, falling 4.56% to its lowest point in 10 months. The index has lost 18% so far in January, marking the largest monthly drop since March 2020.

Technical Outlook: Nifty 50 Levels

According to Vatsal Bhuva, Technical Analyst at LKP Securities, the Nifty 50 found support near 22,980 and formed a hammer tweezer bottom candlestick, indicating potential recovery toward 23,350. However, sustained bullish momentum will only emerge if the index closes above 23,500, where the 21-day EMA is positioned.

Shrikant Chouhan, Head of Equity Research at Kotak Securities, added that the market's short-term trend remains weak. For day traders, the crucial support zone lies at 23,000/75,850. If the index holds above this level, a pullback is likely. If it falls below this support zone, the sentiment could turn negative.

Disclaimer: We recommend consulting certified experts before making investment decisions.