Share market today: Sensex, Nifty rally over 1% despite mixed global cues; Bank Nifty up 2%

Ending four session losing streak, India share market witnessed strong buying momentum on Tuesday, with banking stocks, particularly private lenders, leading the rally. Undermining mixed cues from global peers, the BSE Sensex and NSE Nifty jumped over 1%, while Bank Nifty climbed over 2% after the Reserve Bank of India (RBI) announced a slew of measures to inject liquidity into the banking system.

At 1:00 PM, the 30-share Sensex was trading 850 points, or 1.15%, higher at 76,216, and the Nifty50 gained 217 points, or 0.95%, to cross psychological level of 23,000 to 23,046. However, broader market continued downward trend, with BSE midcap and smallcap indices falling 0.1% and 1.3% respectively.

Among the 30 Sensex pack, 20 stocks were trading higher, led by Axis Bank, HDFC Bank, ICICI Bank, Bajaj Finance, and Tata Steel, gaining in the range of 3-5%. On the other hand, Sun Pharma, ITC, NTPC, Power Grid Corp., Larsen & Toubro, and Nestle India were among top laggards, falling between 1-5%.

On the global front, Asian stocks were trading mostly lower, with Japan’s Nikkei 225 falling up to 1.3%, led by losses in chip-related shares including Advantest Corp., SoftBank Group and Furukawa Electric Co. Hong Kong’s Hang Seng was up 0.14%, while Australia’s ASX 200 ended 0.12% lower. Meanwhile, stock markets in China, Indonesia, South Korea, Taiwan and Vietnam were closed for Lunar New Year holidays.

In the overnight trade, Wall Street closed on a weak noted, with the Nasdaq composite falling over 3% amid sharp selling in tech stocks amid concerns about growing competition in the artificial-intelligence (AI) market. Tech heavyweight Nvidia crashed nearly 17% amid fear that China-based DeepSeek' low-cost AI model may impact lofty valuations of chipmaking companies.

In India, chipmaking stocks such as Netweb Technologies and Kaynes Technology fell up to 20% despite positive broader market, tracking weakness in tech stocks globally.

“DeepSeek’s recent developments have brought concerns around AI capex sustaining to the fore for the market. DeepSeek’s models, with high efficiency in training and inference, offer significant cost advantages, potentially impacting level of AI hardware spend. Nvidia is the most exposed to this, but it impacts the broader semiconductor sector as well. Companies like TSMC and ASML are less exposed due to a much more diversified revenue base and less competitive pressures,” says Arindam Mandal, Head of Global Equities at Marcellus Investment Managers.

Bank Nifty rose over 2% as banking stocks surged after the central bank proposed to infuse ₹1.5 lakh crore into the banking system to ease rising liquidity crunch, including bond purchases and dollar/rupee swaps. The central bank has proposed to buy government securities worth ₹60,000 crore in three different tranches, while it plans to conduct a USD/INR buy/sell swap auction of $5 billion for a tenor of six months on January 31.

The Reserve Bank of India's proposed measures are positive steps, but these may not be sufficient given the current liquidity deficit of ₹3 lakh crore, says Murthy Nagarajan, Head-Fixed Income, Tata Asset Management. “We expect additional measures from the central bank to ensure stability in liquidity. Specifically, we anticipate a 50 basis point cut in the Cash Reserve Ratio (CRR) in the February MPC policy. A combination of liquidity enhancement, rate cuts, and growth-supporting measures in the upcoming budget will be crucial to driving economic growth,” he explains.

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