The Nifty index exhibited a notable recovery, rebounding over 340 points from an early morning low of 21,137. The day concluded with gains of 215 points, reaching a closing level of 21,465. The NSE Cash market volumes, while lower compared to the previous day, remained higher than recent averages, according to Nandish Shah, Deputy Vice President of Retail Research at HDFC Securities.
Following a significant decline on the preceding day, the Nifty Midcap 100 and Smallcap 100 indices recovered some losses, posting gains of 1.80% and 1.70%, respectively. Advancing shares outnumbered declining shares, with the advance-decline ratio standing at 1.83 on the BSE. All sectoral indices closed in positive territory, except for Nifty Private Banks. Notably, Nifty Media, Nifty Metal, and Nifty Oil/Gas showed the most significant increases.
China's central bank's announcement of a 50 basis points reduction in the reserve requirement ratio for commercial banks, starting from February 5, aimed at boosting economic growth, influenced the market positively. This move is expected to inject approximately 1 trillion yuan ($140 billion) worth of liquidity into the market. Metal stocks gained ground, as an upswing in the Chinese economy could stimulate demand for metals, given China's status as the largest global consumer of commodities.
Looking ahead, the near-term resistance for Nifty is identified in the 21,700-21,750 zone. Traders are advised to be cautious and consider lightening trading long commitments in this resistance zone.
(With Agency Inputs)
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