Nifty and Sensex Gain Ground in Early Trading as US Markets Plummet Over AI Concerns

Synopsis

In early trading, the Nifty and Sensex indices showed positive movement following a significant decline in US markets due to concerns over artificial intelligence. Major banks and tech stocks contributed to this rebound, while experts pointed to key resistance and support levels for the Nifty. Caution is advised for traders amidst market volatility.

Key Takeaways

Mumbai indices opened higher after a seven-month low.
S&P 500 and Nasdaq showed losses due to AI concerns.
Key resistance for Nifty at 23,000-23,050.
Foreign investors sold equities while domestic investors bought.
Caution recommended for traders amid volatility.

Mumbai, Jan 28 (NationPress) The domestic benchmark indices commenced trading on a positive note on Tuesday after concluding the previous session at a low not seen in over seven months.

As of 9:33 a.m., the Sensex climbed by 303 points or 0.41 percent to reach 75,694, while the Nifty 50 increased by 70 points or 0.30 percent, standing at 22,898.

HDFC Bank, ICICI Bank, Infosys, Axis Bank, and State Bank of India showed gains on the NSE Nifty 50 index during early trading. Additionally, the Nifty Bank index rose by over 1 percent.

In Asia, Japanese stocks experienced significant losses as equities fell following a challenging session on Wall Street, triggered by a Chinese artificial intelligence (AI) model from the DeepSeek startup, which caused a major sell-off in US semiconductor firms.

The Nasdaq experienced its steepest one-day percentage decline since December 18 on Monday (US time), with AI giant Nvidia plummeting by 17 percent, wiping out approximately $593 billion in market value.

Experts indicate that levels of 23,000 and 23,050 may act as significant resistance points for the Nifty, whereas 22,800 and 22,750 could serve as crucial support levels.

“Should it drop below 22,750, intensified selling pressure may drive the market down to 22,600 levels. The recommended strategy is to minimize weak long positions around 23,000-23,050. However, if it descends to 22,600 during the week, it may be prudent to consider purchasing select stocks with a medium to long-term perspective,” stated Shrikant Chouhan, head of equity research at Kotak Securities.

On Monday, Indian markets faced considerable selling pressure throughout the trading day, beginning with a significant gap-down.

Foreign Institutional Investors (FIIs) sold equities amounting to Rs 5,015 crore on January 28, while Domestic Institutional Investors purchased equities worth Rs 6,642 crore on the same day.

“In light of the current volatility, traders are encouraged to proceed with caution, implement rigorous stop-loss measures, and refrain from holding long positions overnight to effectively manage risk,” advised Hardik Matalia from Choice Broking.