The benchmark indices, Sensex and Nifty 50, ended their two-session losing streak on Friday, January 16, driven by strong buying in IT majors such as Infosys, TCS, and Tech Mahindra.
The Sensex advanced 188 points, or 0.23%, to close at 83,570.35, while the Nifty 50 finished 29 points, or 0.11%, higher at 25,694.35.
The upward movement in the indices was largely led by heavyweight IT and banking stocks. IT shares dominated the list of top five gainers on the Nifty 50, buoyed by improved sentiment after Infosys upgraded its revenue growth outlook. Banking stocks also moved higher on expectations of solid Q3 earnings.
"Markets largely consolidated during the week amid mixed cues and ended almost unchanged. After a volatile start, benchmark indices remained range-bound in the subsequent sessions. The Nifty and Sensex finally settled at 25,694.35 and 83,570.35, respectively. Broader indices moved largely in line with the benchmarks and ended with modest gains," said Ajit Mishra, SVP, Research, Religare Broking.
Stock Market Outlook this week(19 to 23/01/26):
According to Ponmudi R, CEO, Enrich Money, Indian markets head into the new week with a cautious but stock-specific tone, as investors balance domestic earnings cues against global macro and geopolitical developments.
Banking stocks are likely to remain in the spotlight as markets digest quarterly results from heavyweights such as ICICI Bank and HDFC Bank, along with a host of private and public sector lenders, Ponmudi said.
"On the global front, uncertainty around U.S. trade negotiations and the continued 50% tariff on Indian imports remain a headwind for sentiment. However, attention is shifting to the India-EU trade agreement, which is expected to be concluded later this month and could act as a meaningful catalyst for improved investor confidence. Meanwhile, U.S.-Iran rhetoric continues to act as a short-term driver of global market sentiment, influencing oil prices and cross-asset positioning. While recent de-escalation comments have capped some of the upside in crude, rapidly changing headlines are keeping investors cautious and tactically positioned, with energy and safe-haven assets likely to lead any risk-on or risk-off moves.
Overall, the near-term outlook remains guarded, with markets expected to be driven by earnings outcomes, global trade signals and geopolitical developments, favouring selective, stock-specific opportunities over broad directional bets," he added.
Top 5 triggers for the Indian stock market
Q3 results 2026
As we head into the second week of earnings season, several large and mid-cap companies across sectors will be declaring December quarter results in the coming week.
IRFC, Eternal (Zomato), InterGlobe Aviation (IndiGo), BHEL, Coforge, JSW Steel, BPCL, and Cipla are among the marquee companies to release their earnings next week.
"Participants will initially react to the earnings of key heavyweights such as Reliance Industries, HDFC Bank, and ICICI Bank. Thereafter, focus will shift to the broader set of Q3 earnings from several large and mid-cap companies across sectors," said Ajit Mishra of Religare Broking in a note.
India-US trade deal
Two US lawmakers have called on President Donald Trump to seek more favourable terms for pulse crops in any future trade agreement with India, arguing that US farmers are at a "significant competitive disadvantage" because of what they termed "unfair" tariffs imposed by New Delhi, according to a PTI report.
In a January 16 letter to Trump, Republican Senators Steve Daines of Montana and Kevin Cramer of North Dakota noted that their states are the two largest producers of pulse crops, including peas, while India is the world's biggest consumer, accounting for roughly 27% of global demand.
US economic data
On the global front, US macroeconomic data, including GDP growth, inflation trends, jobless claims, and PMI readings, will influence risk sentiment and currency movement.
Gold, silver rates
Gold and silver price movements will be key for the Indian stock market, as the precious metals have come under pressure due to the strong US Dollar and easing tensions between the US and Iran. In case of a cooling in the gold and silver prices, investors may switch money from bullions to other assets, which includes equities also," said Anuj Gupta, a SEBI-registered analyst.
Spot gold dipped 0.1% to $4,610.86 an ounce by 1217 GMT. Despite the pullback, the metal remains on track for a weekly gain of around 2%, having touched a record high of $4,642.72 on Wednesday. U.S. gold futures for February delivery were down 0.2% at $4,615.
Silver also came under pressure, with spot prices falling 1.6% to $90.82 an ounce. Even so, the metal is set for a weekly rise of more than 13% after hitting a fresh all-time high of $93.57 in the previous session.
FII Activity
"The sustained selling by FIIs continued for the week ending on 16th January. The total FII selling for January up to the 16th stood at ₹22529 crores. This month, FIIs were sellers on all days except one. The underperformance of India vis-à-vis other major markets is continuing in early 2026, also. YTD return from Nifty stands at -1.73 %," said Dr VK Vijayakumar, Chief Investment Strategist, Geojit Investments.
Dr VK Vijayakumar further added that a significant feature of the market behaviour in 2025 was that India's tepid performance last year ( Nifty return of only 10%) was despite the massive DII investment of ₹7.44 lakh crores, which completely eclipsed the total FII selling of ₹166283 crores. The principal reason for this tepid performance was the poor earnings growth and the consequent elevated valuations in India. The ongoing suspense over the US-India trade agreement also affected sentiment.
"Now it appears that the FII selling trend may continue until some positive triggers for a market rally happen. The AI trade, which dominated the stock market trend in 2025, is also continuing in early 2026. A reversal of this trend might happen sometime in 2026," Dr Vijayakumar added.
Technical Outlook
Nifty 50
According to Ajit Mishra of Religare Broking, the Nifty continues to hover near its medium-term moving average, the 100 DEMA, indicating a tussle between bulls and bears.
"A decisive break below this level could trigger further downside toward 25,300, followed by the key long-term support near the 200 DEMA at 25,150. On the upside, any rebound is likely to face resistance in the 25,900-26,000 zone, with the next hurdle around 26,200," said Mishra.
Bank Nifty
The Bank Nifty continues to exhibit relative strength and is holding comfortably above its short-term moving average, the 20 DEMA.
"The prevailing outperformance is likely to continue, with immediate support at 59,200 and a stronger cushion at 58,700. On the higher side, the 60,500-61,200 zone remains the key target range," he added.
Source: Mint
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.
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