The benchmark index closed on a green note after a five consecutive losing streak of almost 1,300 points and managed to close the session above 17,000 marks. Bank Nifty showed much more strength than Nifty 50 and closed the session at 37,706.75 level with a gain of 759 points.
At close, the Sensex was up 366.64 points or 0.64 percent at 57,858.15. The broader Nifty was up 128.90 points or 0.75 percent at 17,278.00. About 1,935 shares have advanced, 1,330 shares declined, and 84 shares are unchanged.
On the sectoral front, all the major indexes ended in green except Nifty IT while Nifty Media, and Auto were the top gainers. Stocks like Maruti, Axis Bank, SBIN, and Bharti Airtel were the top gainers while Wipro, Titan, Bajaj Finserv, and Tech Mahindr were prime laggards.
A relief rally was on the cards as the Sensex had plunged more than 1500 points in just 5 sessions. Markets made a comeback due to optimism in key European indices although the rest of Asia ended in negative territory, said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd, said.
"Volatility will continue to stay as concerns related to geopolitical developments, rising oil prices and US Fed's likely move on rate hike will continue to keep investors on the edge. The short term formation is still in to the weak side, but the intraday texture suggests continuation of a pullback in the next couple of trading sessions. For traders, 17,000 and 17,100 would be the immediate support zone and if the Nifty succeeds to trade above the same, a reversal formation could lift the index upto 17,400-17,450 levels," Chouhan added.
Mohit Nigam Head-PMS, Hem Securities said, "Though Indian equity benchmarks made a gap-down opening today tracking sell-off in the Asian peers, the markets soon trimmed their losses and ended trading in the positive zone. Buying in Metal, Telecom and PSU were aiding the markets, whereas selling in Energy and Consumer stocks weighted on the indices. On the global front; Asian markets were trading lower fueled by concerns over the US Federal Reserve's plans to hike interest rates and tensions in Ukraine. On the technical front 17,000 and 17,500 are immediate support and resistance in Nifty 50 respectively. For Bank Nifty 37,200 and 38,000 are immediate support and resistance respectively."
Palak Kothari, Research Associate, Choice Broking said, "On the technical front, the index has taken support from 78.6 percent RL of its previous up rally which suggests a bounce back in the counter. Furthermore, the index has formed a bullish candle with the support of a lower band of Bollinger which suggests strength for the next session. Moreover, the momentum indicator RSI bounced from oversold zone and showed divergence on an hourly time frame as well MACD is also trading with positive crossover on an hourly time-frame which adds bullishness in prices. At present, the Index has support at 17,000 levels while resistance comes at 17,500 levels, crossing above the same can show 17,700-17,800 levels. On the other hand, Bank Nifty has support at 37,000 levels while resistance at 38,000 levels."
Deepak Jasani, Head of Retail Research, HDFC Securities said, "Nifty recovered smartly from the opening lows to end the day in the positive. It has recovered from an important support of around 16800. Advance decline ratio improved sharply to much above 1:1 after touching an 22 month low on the day before. After a trading holiday on January 26, Indian markets will react to the outcome of the US Fed meet due on 26 evening. While some initial weakness on January 27 cannot be ruled out, Nifty seems to have made a near-term bottom on January 25. 17,379 could be a resistance for Nifty while 16,998 could be a support in the near-term."
The benchmark Nifty swooped higher in the final hour of trade following support of good earnings reports from select blue-chips, said Prashant Tapse, Vice President (Research) at Mehta Equities Ltd. "However, massive profit booking could again be the preferred theme in the near term if the Federal Reserve turns out to be more hawkish at the FOMC meeting. We remain cautious on markets in the backdrop of an anticipation of a populist budget ahead of five state elections."
