First Trade: Sensex adds 343 points, Nifty nears 23,200 level

After a sharp drag in the previous day's trade, Indian equities on Tuesday (January 14) opened. At the start, Nifty was up 0.48 per cent or 110.25 points at 23,196.2, while the 30-share Sensex was up 0.45 per cent or 343.1 points at 76,673.11. Broader markets, meanwhile, outperformed the headline indices, with the Nifty Midcap 100 index up 1.7 per cent in early trade.

Sectorally, amid broad-based buying, IT and FMCG indices traded in the red, with the IT index leading the losses - down over 1 per cent.

Investors are maintaining a cautious approach ahead of the US inflation reports and the Federal Reserve meeting later this month. Persistent FII selling and rising crude oil prices are also putting pressure on the market.

Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services said, "The constant refrain from many saner voices  that the broader market is overpriced and may correct sharply is now playing out. Reversion to mean valuations are happening in large caps, too."

Strengthening dollar, 10-year US bond yields rising to above 4.7%, uncertainty regarding Trump’s actions after January 20th, slowdown in India’s economy and poor corporate earnings, sharp surge in crude .....all have combined to cause this market correction.
 
Now it appears that the market is a bit oversold and this favours a bounce back in the near-term. But that trend, if it plays out, is unlikely to sustain, added Vijaykumar.

Technical outlook

Anand James, Chief Market Strategist, Geojit Financial Services on the Nifty outlook said, "the 23000 region has prompted the bulls to regroup. However, while this was anticipated, there is little else to suggest that this is anything more than a dead cat bounce. Alternatively, a direct rise above 23370 could spark a 23640 move."

For the day, despite the threat of “sell on rallies” mode ever-present, we may play for upswings as long as above 23176, he added.

Asian markets 

In Tuesday's trade, Asian stocks traded mixed, with Chinese stocks gaining amid reports of a gradual increase in U.S tariff under Trump. The key MSCI Asia ex Japan index traded was up 0.93 per cent at 554.63. Meanwhile. Japan's Nikkei was down sharply by 1.76 per cent, putting pressure on other regional equities.