Tue Jan 28 04:20:00 UTC 2025: ## Indian Markets Rebound After Seven-Month Lows, But Global Uncertainty Remains

**Mumbai, India** – Indian benchmark indices staged a modest rebound on January 28, climbing after hitting seven-month lows the previous day. The Sensex gained 0.5 percent, closing at 75,708, and the Nifty rose 0.4 percent to 22,923. This recovery follows a challenging January, which saw a 3.5 percent drop in both indices, marking a potential fourth consecutive monthly loss – the longest such streak in over two decades.

Leading the gains were financials, boosted by the Reserve Bank of India’s (RBI) liquidity injection measures, including a Rs 60,000 crore OMO purchase and a VRR auction. Analysts view these actions as possible precursors to an upcoming rate cut. However, the broader market showed mixed performance, with the BSE Midcap index remaining flat and the BSE Smallcap index falling 0.8 percent.

Foreign Institutional Investors (FIIs) continued to offload Indian equities, selling over Rs 74,000 crore in January, while Domestic Institutional Investors (DIIs) purchased stocks worth Rs 73,500 crore. While FII selling remains a concern, analysts noted a marginal improvement in their long-term ratio and anticipate support for the Nifty around 22,750-22,800.

Individual stock performance was varied. Shriram Finance, Axis Bank, Bajaj Finance, IndusInd Bank, and Tata Steel were among the top Nifty 50 gainers, while Sun Pharma, M&M, Wipro, Dr. Reddy’s, and Coal India were among the losers. Kaynes Technology experienced a significant 16 percent drop after revising its FY25 revenue guidance downward, and Netweb Technologies fell 8 percent, mirroring a decline in Nvidia’s stock. Nvidia’s fall followed the emergence of DeepSeek, a Chinese AI startup offering a cheaper alternative to ChatGPT, impacting global tech sentiment.

The upcoming U.S. Federal Reserve rate decision and India’s Union Budget are key events shaping market expectations. While the Fed is unlikely to significantly cut rates, market attention is shifting towards the domestic fiscal roadmap. The global tech sector also faces uncertainty after DeepSeek’s disruptive entry. Asian markets showed a mixed reaction, with Hong Kong’s Hang Seng Index rising slightly while Japan’s Nikkei 225 declined. Several Asian markets were closed for the Lunar New Year holiday.

Despite the rebound, analysts remain cautious, citing ongoing FII outflows and uncertainty surrounding global economic factors as potential headwinds. The upcoming budget and Q3 corporate earnings will play a significant role in determining future market direction.

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