In the 30-stock Sensex, 21 stocks traded higher. Gains were led by Axis Bank, which rose 1.66%
The Indian stock market showed resilience on Tuesday, January 28, 2025, trading higher amidst mixed global cues. The BSE Sensex gained 388.82 points, or 0.52%, to trade at 75,754.99, while the Nifty50 rose 68.30 points, or 0.3%, to 22,897.45. These positive movements reflect improved investor sentiment despite recent global market volatility. Gains in banking, financial services, and realty stocks boosted indices, while healthcare and pharma stocks acted as a drag.
Sectoral Performance in India
Across sectors, the PSU Bank index emerged as the top performer, climbing 2.04%, driven by strong buying interest in public sector banks. Other indices, such as Nifty Bank, Financial Services, and Realty, gained around 1%. The IT and Metal sectors traded in the green as well, recovering from previous losses. However, the Healthcare and Pharma indices fell by 1.50% and 1.45%, respectively, reflecting subdued performance. The FMCG index edged lower by 0.36%, while the Auto index remained marginally down by 0.02%.
Market Movers on Sensex and Nifty
In the 30-stock Sensex, 21 stocks traded higher. Gains were led by Axis Bank, which rose 1.66%, followed by Bajaj Finance, IndusInd Bank, Infosys, and HDFC Bank. On the losing side, Sun Pharma fell 2.16%, making it the worst performer on the index. Other laggards included Mahindra & Mahindra, Power Grid Corporation, NTPC, and UltraTech Cement.
On the Nifty50, 27 stocks were in the green, with Shriram Finance leading the pack, gaining 2.50%. Axis Bank, Bajaj Finance, HDFC Bank, and Tata Steel followed closely with significant gains. Sun Pharma, down 2.54%, was the worst-performing stock on the index, followed by Dr. Reddy’s, Mahindra & Mahindra, Coal India, and Cipla.
Broader Market Indices and Volatility
The broader market presented a mixed picture. The Nifty Smallcap 100 declined by 0.97%, reflecting weakness in smaller stocks. Meanwhile, the Nifty Midcap 100 edged higher by 0.07%. The market sentiment remained cautious as foreign portfolio investors continued their selling streak, adding to the pressure on small and mid-cap stocks. India VIX, the volatility index, remained elevated, indicating heightened uncertainty among market participants.
Global Market Impact
Global markets have been reeling from the emergence of China’s DeepSeek, a cost-effective generative AI model, which has sparked sell-offs in tech-heavy indices worldwide. The Nasdaq Composite fell 3.1% on Monday, while the S&P 500 declined 1.46%. The Dow Jones Industrial Average, in contrast, bucked the trend, gaining 0.65%.
The sell-off in U.S. markets was led by AI chipmaker Nvidia, which lost nearly $600 billion in market capitalization, marking the largest single-day market cap drop in U.S. corporate history. This decline has raised concerns about the competitive landscape in artificial intelligence, particularly for U.S.-based companies.
Macroeconomic Factors Driving Sentiment
Uncertainty surrounding global macroeconomic factors has kept markets volatile. The Trump administration’s evolving tariff policies, including potential new tariffs on top trading partners such as China, Mexico, and Canada, have added to the jittery sentiment. Furthermore, the anticipation of upcoming Federal Reserve and European Central Bank meetings has introduced additional caution, with investors closely watching for interest rate decisions.
RBI’s Measures to Address Liquidity Concerns
In India, the Reserve Bank of India (RBI) announced a three-pronged approach to address tight liquidity conditions in the banking system. The measures are expected to inject approximately ₹1.5 trillion into the system, alleviating liquidity concerns. Analysts believe these steps may increase the likelihood of an interest rate cut in the RBI’s upcoming monetary policy review.
Separately, the RBI Governor emphasized the need for robust systems to combat rising digital frauds and improve oversight of third-party service providers. These measures aim to enhance customer protection and strengthen the overall financial ecosystem.
Primary Market Activity
In the primary markets, activity remained limited in the mainline segment. In the SME segment, H.M. Electro Mech Limited and GB Logistics Commerce Limited saw the final day of their subscription windows. The basis of allotment for the GB Logistics IPO is also set to be finalized today.
Asia-Pacific Markets Performance
In the Asia-Pacific region, markets presented a mixed picture. Australian, Taiwanese, South Korean, and Chinese markets remained closed for the Lunar New Year holiday. In Japan, the Nikkei 225 fell 0.65%, while the broader Topix index declined 0.41%. Japan’s chip-related stocks, including Advantest, Tokyo Electron, and Renesas Electronics, continued to extend losses amid global tech sell-offs.
Hong Kong’s Hang Seng Index, in contrast, gained 0.17%, buoyed by investor optimism despite global market weakness.
Global Commodity and Forex Market Developments
Oil prices fell approximately 2% on Monday, driven by eased concerns over supply disruptions following an agreement between the U.S. and Colombia. Gold prices also declined by more than 1%, retreating from near-record highs as investors liquidated bullion positions amidst broader market sell-offs.
In the forex market, the U.S. dollar weakened against major currencies, including the Japanese yen and Swiss franc, which are traditionally viewed as safe-haven assets. The dollar index declined 0.3%, hovering near its lowest level since mid-December.
Cryptocurrency Market Update
The cryptocurrency market remained volatile, with Bitcoin falling below $100,000 for the first time in a week before rebounding to $101,455. Ethereum also faced selling pressure, trading at $3,215.35. The emergence of DeepSeek has raised concerns about the competitive dynamics in the AI space, which has implications for cryptocurrencies tied to blockchain-based AI projects.
Investor Sentiment and Outlook
The Indian stock market’s performance on Tuesday reflects a cautious recovery amidst global uncertainties. Gains in banking and financial stocks have provided much-needed support to benchmark indices. However, concerns over foreign portfolio investor outflows and global economic policies remain key risks.
Market participants will closely monitor developments in the AI sector, central bank meetings, and macroeconomic policies to gauge their impact on equity markets. In the near term, volatility is expected to persist as global markets digest recent events and investors adjust their strategies accordingly.
The broader market sentiment remains fragile, underscoring the importance of navigating the current environment with careful risk management and informed decision-making. The RBI’s measures to boost liquidity and improve systemic oversight provide some optimism, but external factors are likely to keep market movements unpredictable in the coming sessions.
