Will Sensex, Nifty extend gain amidst volatility? Bajaj Auto, Maruti, Tata Motors, Adani Power shares eyed

Indian share market is expected to open flat-to-higher on Wednesday, tracking positive cues from global peers, but caution will prevail ahead of the U.S. Fed interest rate decision on Thursday and the Union Budget announcement on Saturday. The muted trend at Gift Nifty also indicates a subdued start for Sensex and Nifty, with Nifty futures trading 25.5 points, or 0.11%, lower at 23,027 mark, revering early gains.

The market is expected to see stock specific reactions as a big lot of companies are set to release their numbers, including Bajaj Finance, Adani Power Raymond, and Voltas. Sector wise, auto space will be in focus as index heavyweights Maruti Suzuki and Tata Motors will unveil their Q3 numbers, while investors react to Bajaj Auto Q3 results.

U.S. stocks recover from Monday’s AI rout

In the overnight trade, Wall Street closed on positive note, with tech heavyweight Nvidia and other artificial intelligence-linked technology shares recovering from Monday’s sharp losses amid bargain hunting. The tech-heavy Nasdaq Composite rebounded 2% and chipmaker Nvidia climbed 8.9%, a day after losing 17%. At the closing bell, the Dow Jones Industrial Average was up 0.31%, while the S&P 500 added 0.92%.

Asian stocks follow Wall Street higher

Markets in Asia-Pacific region were trading higher, tracking firm cues from Wall Street, amid recovery in tech stocks. The investors shifted their focus to the Federal Reserve’s rate decision and US mega-cap earnings. Japan’s Nikkei 225 rose 0.55% after losing over 1% in the previous session, while Australia’s ASX 200 ended 0.9% higher. Most other major markets in the region, including China and Hong Kong, remained closed for Lunar New Year holidays.

Domestic market gain on RBI’s liquidity boost

Ending four sessions losing streak, the equity benchmarks Sensex and Nifty settled in positive territory on Tuesday, led by strong rally in banking and financial stocks after the Reserve Bank of India announced a slew of measures to boost liquidity in the banking system. The 30-share Sensex ended 535.24 points higher at 75,901.41, while the NSE Nifty settled 146.90 points higher at 22,976.05. Bucking the trend, the BSE midcap index closed 0.6% lower, while the smallcap index slumped 1.8% amid mixed Q3 results, weak global cues and persistent FII selling.

The Foreign institutional investors (FIIs) sold equities worth Rs 4,920.69 crore on January 28, while domestic institutional bought equities worth Rs 6,814.33 crore.

Technical outlook

From a technical standpoint, there have been no significant developments in the Nifty50 index, but the support near the sloping trendline of ‘Falling Wedge’ seems to have its significance. “On the levels front, 22800 remains the critical support zone on an immediate basis. On the flip side, 23100-23150 seems to be the intermediate hurdle, while formidable resilience is seen around 23350-23400, breaching which could only provide some thrust to the bullish sentiment in the markets,” says Osho Krishnan, Sr. Analyst, Technical & Derivatives, Angel One.

He further said that the heightened volatility remains a significant concern, with small and mid-cap stocks being the primary victims. It is essential for traders to remain vigilant and assess potential strategies to navigate this landscape effectively.

“We believe that 23,000/76000 will act as a trend decider level for the bulls. Above 23,000/76000, the market could retest levels of 23,100/76300 to 23,150/76500. Conversely, below 22,900/75700, selling pressure is likely to accelerate, and the market could slip to levels of 22,800/75400 to 22,775/75200,” says Shrikant Chouhan, Head Equity Research, Kotak Securities.

Stocks to watch

Earnings today:  Tata Motors, Maruti Suzuki India, Bajaj Finance, Adani Power, Ambuja Cements, Raymond, Voltas, and Allied Blenders and Distillers Blue Dart Express, Blue Star, Brigade Enterprises, CarTrade Tech, Chalet Hotels, Deepak Fertilisers, Indian Bank, JK Paper, Jindal Stainless, KPIT Technologies, Olectra Greentech, and Hitachi Energy India among others are set to announce their Q3 numbers today.

Meanwhile, Bajaj Auto, JSW Energy, BHEL, Mahanagar Gas, Exide Industries, Bosch, Colgate-Palmolive, Som Distilleries & Breweries, Suzlon Energy released their earnings report post market hours.

ITC: Shares of FMCG heavyweight will be in focus as its hotels arm, ITC Hotels, will make its debut on the stock exchanges.

Denta Water IPO listing: The equity shares of Denta Water will be listed the Indian stock market today after the strong demand for its initial public offering (IPO).

Lloyds Enterprises: The board of the company has approved further investment to acquire a 12.25% equity stake in Lloyds Infrastructure and Construction. The cost of acquisition is Rs 14.2 crore.

IDFC First Bank: The bank’s board appointed Nitin Chauhan as the Chief Information Security Officer of the bank, effective January 28.

ITD Cementation: The Competition Commission of India has approved the acquisition of up to 72.64% shareholding in ITD Cementation India by Dubai-based Renew Exim DMCC.