Ambassador's Optimism
The US Ambassador to India, Sergio Gor, injected a dose of optimism into the market by emphasizing the crucial partnership between the US and India, specifically
under the Trump administration. He made it clear that India is an indispensable partner. The ambassador mentioned that both nations were actively engaged in discussions, with another round of talks scheduled. Gor also noted that President Trump was expected to visit India within the next one to two years. These pronouncements were key, significantly impacting market sentiment and triggering a notable recovery in the Bank Nifty index. The ambassador's statements highlighted the importance of trade relations, and portrayed ongoing negotiations as a sign of a strong, growing partnership. Furthermore, the ambassador also touched upon the strategic partnership initiative, Pax Silica, framing it as a crucial project involving both nations.
Market's Immediate Response
Following the positive statements, the Bank Nifty index swiftly rebounded, recovering approximately 650 points from its intraday low. The index managed to reclaim the 59,500 level, reflecting the immediate positive sentiment sparked by the US ambassador's comments. According to market analysis, if the Bank Nifty trades above this level, the index could potentially rally towards 59,609–59,967–60,195. However, the analysis also showed if the index were to fall below 59,382, profit booking might emerge, causing a correction to the levels of 59,024–58,796–58,439. Choice Broking identified immediate support near 59,000, cautioning that a breakdown could push the index down to 58,900–58,800. Furthermore, the 59,500–59,600 range posed a significant resistance level, and a decisive breakout above this zone would be necessary to revive the bullish sentiment.
Technical Outlook Examined
Axis Direct pinpointed the trend-deciding level for Bank Nifty at 59,382, which the index had successfully surpassed. Furthermore, the Nifty Bank index saw a strong recovery from its intraday low on January 12th, mirroring the market’s positive response to news regarding the India-US trade deal. Sunny Agrawal from SBICAPS Securities attributed the short covering during the day to the US ambassador's encouraging statements and the emphasis on India's importance as a trade partner. Moreover, Shrikant Chouhan of Kotak Securities noted that the 20-day SMA at 59,500 was a key level. Below this level, the correction could extend to 58,800–58,500. A rebound above 59,500 might see the index move toward 59,800–60,000. These technical analyses highlight the importance of key levels in determining the index's future trajectory.
Top Bank Performers
Several banks showed notable gains during the market's recovery. IndusInd Bank led the pack, increasing by over 2 percent. Following closely behind, ICICI Bank saw gains of over 1 percent. Other banks, including State Bank of India, AU Small Finance Bank, Yes Bank, and Union Bank of India, all advanced by nearly 1 percent each. Kotak Mahindra Bank and HDFC Bank also traded positively, albeit with marginal gains. However, not all banks benefited from the overall market recovery. Punjab National Bank, Axis Bank, Bank of Baroda, Canara Bank, IDFC First Bank, and Federal Bank experienced declines of up to 1 percent, contrasting with the general upward trend of the index. This mixed performance underscores the varying impacts of the day's events across different financial institutions.
