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Indian Market Mayhem: Mahakumbh Correction, FIIs Flee, and Nifty’s Next Move Awaits

Daily Equity - Indian Market Mayhem: Mahakumbh Gains, FIIs Flee, and Nifty’s Next Move Awaits

Indian markets saw a 1% dip as FIIs sold heavily, crude prices surged, and weak earnings shook confidence. Key levels at 22,657 and global cues hold the next week’s outlook.

Weekly Wrap Up

Indian equity markets remained in consolidation last week as persistent FII selling, mixed corporate earnings, and a sharp rise in crude oil prices weighed on sentiment. The benchmark indices, Nifty and Sensex, closed at 23,203.20 and 76,619.33, respectively, marking a 1% weekly decline. The week saw cautious trading, driven by weak global cues and concerns over Donald Trump’s upcoming swearing-in on January 20, especially regarding trade tariffs.
On the technical front, Nifty faced resistance near 22,700, with support at 22,900. A gap-down fall on Monday caused panic, breaking bullish confidence, while the Bank Nifty and IT index signaled short-term weakness. However, a late-week relief rally brought optimism as several stocks showed signs of bottoming out. Gains in sectors like Oil & Gas, Power, PSU, and Metals helped trim intraday losses despite pressure from IT and Banking stocks.
Major contributors included Reliance Industries, which gained post strong quarterly earnings, offsetting declines from Infosys and Axis Bank. Despite the three-day winning streak ending, experts remain optimistic about potential upward movement in the coming weeks. Overall, the markets adhered to expectations amid fluctuating trends and weak investor sentiment.

Outlook For Next Week

The Indian equity markets are expected to maintain a cautious tone next week as technical indicators suggest continued downward correction, particularly in the IT and banking sectors. Weak results and conservative management guidance have led to fresh sell signals, with critical support levels at 22,657, 22,430, and 21,700. However, any sustained rally would require the Nifty to cross and close above 24,750.
Key global and domestic factors, such as Q3 earnings, US bond yields, crude oil prices, and foreign fund outflows, will play a significant role. Trade policies under Donald Trump’s administration after his inauguration on January 20 will require attention from investors, as potential policy shifts could impact emerging economies. Sectors like IT and pharmaceuticals may face uncertainties, while defense and energy could benefit from stronger US-India ties.
Meanwhile, easing retail inflation and selective heavyweight stock strength may provide some relief. The upcoming World Economic Forum in Davos and ongoing Mahakumbh Mela are also expected to positively influence tech and tourism-related sectors. Despite persistent FII selling and mixed earnings, broader indices have shown resilience. Market participants remain optimistic about a potential recovery in the medium term, supported by easing inflation and sectoral gains in energy and metals.

Also Read: Mahakumbh 2025: Top Movers To Buy In This Correction

Top Global Events To Watch Out
January 20: Swearing-in ceremony of Donald Trump as the 47th president of the United States of America.
January 21: UK Jobless Claims, Unemployment Data
January 23: Japanese Trade Data
January 23: US and Eurozone Consumer Confidence Data
January 24: Japanese CPI, Rate Decision
January 24: Indian HSBC Manufacturing & Services PMI
January 24: Eurozone HCOB Manufacturing & Services PMI
January 24: S&P Global Manufacturing & Service PMI

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