Top News

Indian Markets: Indian equity benchmarks opened Wednesday’s session on a firm footing, building on gains from the previous day as investors responded positively to the conclusion of a long-anticipated trade agreement between India and the European Union. The deal has strengthened expectations of improved trade flows and broader economic momentum, encouraging buying across most segments of the market during early hours.

Benchmarks Open Higher Across the Board

By 9:30 am, the Sensex was trading 545 points higher, marking a rise of 0.67 percent to reach 82,402. The Nifty also showed healthy momentum, advancing 183 points or 0.73 percent to trade at 25,359. Early trading activity suggested a continuation of bullish sentiment seen in the prior session, supported by both domestic cues and select global trends.

Broader Market Mirrors Benchmark Strength

The positive tone was not limited to frontline indices. Broader market indicators moved largely in sync with the benchmarks, reflecting wider participation. The Nifty Midcap 100 rose by 0.77 percent, while the Nifty Smallcap 100 outperformed with a gain of 1.17 percent. The movement indicated renewed interest in mid- and small-cap stocks, often seen as a sign of improving risk appetite among investors.

Sectoral Performance Led by Energy Stocks

Most sectoral indices traded in positive territory during early trade. Oil and gas stocks emerged as the strongest performers, with the sector index climbing 2.42 percent. The rally followed a rise in global crude oil prices, with Brent crude nearing the $67 mark, a level last observed in October. Realty, metal, and media stocks also recorded solid gains, advancing 1.54 percent, 1.17 percent, and 1.45 percent respectively. FMCG and PSU banking stocks, however, lagged slightly, posting marginal declines.

Technical Levels Watched Closely

Market participants are keeping a close watch on key technical levels. Analysts indicated that immediate support for the Nifty is seen around the 25,000 mark, followed by a stronger base near 24,800. On the upside, resistance is expected in the 25,300 to 25,400 zone. A sustained move beyond this range could open the door for further gains, while failure to hold support may trigger short-term consolidation.

Institutional Activity Shapes Market Structure

Institutional flows continue to play a significant role in shaping market dynamics. Analysts pointed out that persistent selling by foreign institutional investors has been influenced by relatively elevated valuations, moderate earnings growth, and continued weakness in the rupee. In contrast, domestic institutional investors have remained steady buyers, supported by ongoing fund inflows and expectations of a gradual recovery in corporate earnings.

Derivatives Positioning Signals Potential Volatility

A notable aspect of the current market setup is the sizeable short positions held by foreign investors in index futures. These positions have been backed by sustained selling in the cash market. Analysts cautioned, however, that any positive trigger or unexpected development could lead to short covering, potentially resulting in a sharp upward move in the indices over a short period.

Mixed Cues from Global Markets

Asian markets presented a mixed picture. China’s Shanghai index edged up 0.49 percent, while Shenzhen gained 0.09 percent. Japan’s Nikkei slipped 0.53 percent, whereas Hong Kong’s Hang Seng index jumped 2.31 percent. South Korea’s Kospi added 1.19 percent. In the United States, markets ended the previous session mostly higher, with the Nasdaq rising 0.91 percent and the S&P 500 gaining 0.41 percent, even as the Dow closed lower by 0.83 percent.

Focus Shifts to Earnings and Union Budget

Following the successful conclusion of the India-EU trade agreement, investor attention is now turning to upcoming quarterly earnings announcements scheduled for the week. The Union Budget, set to be presented on Sunday, February 1, is also expected to influence near-term market direction, as participants assess policy priorities and fiscal signals.

Latest Institutional Flow Data

On January 27, foreign institutional investors were net sellers of equities worth Rs 3,068 crore. Domestic institutional investors, meanwhile, provided support to the market by purchasing equities valued at Rs 9,000 crore, helping offset foreign outflows and stabilize overall sentiment.