Ashika Institutional Equities

Indian equity markets witnessed a highly volatile trading session on Friday, with sharp swings on both sides. The benchmark Nifty opened on a muted note at 25,696, advanced to an intraday high of 25,873, but failed to sustain higher levels after facing stiff resistance in the 25,800–25,850 zone. The index eventually slipped to an intraday low of 25,662, reflecting profit-taking at elevated levels. On the sectoral front, IT, Realty, Banking, and Oil & Gas stocks outperformed and provided support to the broader market.

In contrast, Healthcare, Pharma, Consumer Durables, CPSE, and Energy stocks witnessed selling pressure, which capped further upside. The IT sector was the standout performer, gaining 2.9%, driven by a strong rally in Infosys, which surged nearly 5% after reporting robust quarterly earnings and raising its full-year revenue growth guidance. In the derivatives segment, market breadth remained marginally positive, with 131 stocks advancing against 82 declines.

The highest open interest addition was observed in 360ONE, ANGELONE, FEDERALBNK, POLYCAB, and POWERINDIA, indicating heightened activity in these counters. From the Nifty options perspective, maximum Call open interest is concentrated at the 26,000 and 25,800 strike prices, signaling strong resistance at higher levels. On the Put side, maximum open interest is seen at 25,700 and 25,800, suggesting immediate support in the near term. The Nifty PCR stands at 0.68, reflecting cautious market sentiment. Market participants are expected to lighten positions ahead of the weekend, amid ongoing geopolitical uncertainties, to mitigate potential overnight risks.

Motilal Oswal Financial Services Ltd 

Indian equity markets ended marginally higher, supported by positive sentiment in IT & banking. The Nifty closed up 0.1%, while the Nifty Midcap 100 gained 0.2%; the Nifty Smallcap index underperformed, declining 0.3%. Sectoral performance remained mixed, with the capital market index rising 1.3% as stocks stayed in focus following strong third-quarter earnings from Groww, Angel One and 360 ONE WAM, reinforcing confidence in the capital market intermediaries space. The Nifty IT index surged 3.3% after Infosys reported better-than-expected third-quarter financial year 2026 results and upgraded its revenue growth outlook. Public sector banks extended their rally, with the Nifty PSU Bank index gaining 1.2% for the fifth straight session.

On the flip side, pharmaceutical stocks declined 1.3%, while the Nifty Metal index slipped 0.5% due to profit booking after recent gains. Heavyweight bank stocks saw strong buying ahead of the December quarter results from HDFC Bank & ICICI Bank scheduled for January 17. Sentiment was also supported by comments from the Commerce Secretary on January 15 that the first tranche of the India–United States trade deal is close to finalisation. On the geopolitical front, tensions between the US and Iran eased slightly after reports that the US informed Tehran it would not imminently attack, following diplomatic pressure. Markets are expected to trade sideways in the near term, with stock-specific action driven by earnings & trade-related developments while any geopolitical escalations will remain a key risk factor.

Bajaj Broking Research

Indian equity benchmarks gave up a large part of their intraday gains in the latter half of the January 16 session, as profit-taking in heavyweight stocks and caution ahead of key Nifty50 earnings kept sentiment subdued amid persistent global uncertainties. The markets opened on a positive note but gradually lost momentum as the session progressed.

The Sensex ended 187.64 points higher (+0.23%) at 83,570.35, while the Nifty 50 posted a marginal gain of 28.75 points (+0.11%) to close at 25,694.35.

On the sectoral front, Nifty IT and PSU Banks outperformed, providing support to the headline indices. In contrast, Nifty Healthcare, Pharma, and Consumer Durables remained under pressure and featured among the top laggards. Other sectors traded with a mixed bias, underscoring the lack of strong directional cues.

In the broader market, the Nifty Small-cap index declined 0.28%, while Midcap stocks edged up 0.16%, indicating selective, stock-specific buying. Overall, market breadth stayed mixed, pointing to a cautious and range-bound market environment.

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Nifty Outlook

Following a sharp rebound after a two-session correction, benchmark indices saw mild intraday profit-booking as investors remained cautious ahead of key Q3 earnings announcements. Reliance Industries is scheduled to report results post-market on January 16, while ICICI Bank and HDFC Bank will release their earnings on January 17, keeping market participants in a wait-and-watch mode.

The index continues to exhibit elevated volatility in the absence of clear directional cues. The formation of another high-wave candle suggests selling pressure near key resistance levels, with buying interest emerging at lower supports.

Nifty is currently hovering around its 100-day EMA. Monday’s low of 25,473 is expected to act as immediate support. On the upside, the 25,950–26,050 zone remains a crucial resistance band. Nifty is likely to consolidate within the 25,500–26,000 range. A decisive breakout or breakdown from this band will determine the next directional trend.

Bank nifty Outlook

Bank Nifty outperformed the broader market, led by strong gains in PSU banks. The index formed a large bullish candle with both upper and lower shadows, successfully breaking out of the previous six-session trading range, indicating heightened volatility and renewed buying interest. The index rebounded decisively from its 21-day EMA near 59,540 and closed above the key psychological level of 60,000, reflecting improving sentiment.

Going forward, follow-through strength could drive the index toward the 60,400 level in the near term. However, we expect Bank Nifty to remain in a consolidation phase with positive bias within the 58,700–60,400 range. A decisive breakout above this band or a breakdown below it will determine the next directional trend.

On the downside, the 59,000–58,700 zone acts as a critical short-term support, supported by the confluence of the 50-day EMA and the previous month’s low, making it an important level to monitor.