Nifty and Sensex Rebound in Early Trade Despite Global AI Market Fears
"Nifty and Sensex rebound after a seven-month low, gaining momentum in early trade despite global market fears over AI-driven selloffs. Key levels, expert strategies, and market trends analyzed."
Mumbai: The Indian stock market indices opened on a positive note on Tuesday, rebounding after closing at a seven-month low in the previous trading session.
As of 9:33 a.m., the Sensex surged by 303 points (0.41%) to reach 75,694, while the Nifty 50 gained 70 points (0.30%) to trade at 22,898.
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Key Gainers and Market Trends
Major contributors to the early rally included blue-chip stocks such as HDFC Bank, ICICI Bank, Infosys, Axis Bank, and State Bank of India, all of which performed strongly on the NSE Nifty 50 index.
Additionally, the Nifty Bank index witnessed an impressive gain of over 1%, reflecting robust momentum in the financial sector.
Global Markets Impacted by AI-Driven Selloff
Despite the positive start in domestic markets, global cues painted a grim picture. Asian equities faced pressure, with Japanese stocks leading losses, following a sharp decline on Wall Street.
A steep selloff in US semiconductor companies was triggered by a new Chinese artificial intelligence (AI) model developed by the startup DeepSeek. The market reacted negatively to the potential competition posed by this AI innovation.
On Monday (US time), the Nasdaq Composite recorded its biggest one-day percentage drop since December 18, with AI powerhouse Nvidia’s stock plunging by 17%, wiping out approximately $593 billion from its market capitalization.
Technical Analysis and Market Outlook
Market analysts have identified key resistance and support levels for the Nifty index:
- Resistance Levels: 23,000 and 23,050.
- Support Levels: 22,800 and 22,750.
“If the Nifty breaches the 22,750 level, selling pressure could intensify, potentially driving the index down to 22,600. Traders should consider reducing weak long positions around 23,000–23,050 levels.
However, if the market falls to 22,600 during the week, it may present an opportunity to buy select stocks with a medium to long-term view,” said Shrikant Chouhan, Head of Equity Research at Kotak Securities.
Monday’s Market Performance
The Indian stock markets experienced sharp selling on Monday, following a gap-down opening. Foreign Institutional Investors (FIIs) were net sellers, offloading equities worth Rs 5,015 crore on January 28.
In contrast, Domestic Institutional Investors (DIIs) emerged as net buyers, purchasing equities worth Rs 6,642 crore on the same day.
Expert Strategies Amid Market Volatility
Given the heightened volatility, experts recommend cautious trading strategies:
- Implement strict stop-loss measures to minimize risks.
- Avoid carrying long positions overnight.
- Focus on high-quality stocks with strong fundamentals.
“In the current environment, traders must prioritize risk management. Avoid aggressive positions and instead adopt a disciplined approach to navigate market uncertainties,” advised Hardik Matalia, Senior Analyst at Choice Broking.
Also Read | Indian Stock Market Opens Lower Amid Weak Q3 Earnings and Global Cues
Factors Driving Domestic Market Recovery
The positive momentum in Indian equities comes on the back of strong institutional buying by DIIs and optimism surrounding select blue-chip companies. Banking and financial stocks, in particular, provided much-needed support to the indices, reflecting investor confidence in these sectors.
