Stock market today: Nifty 50, Sensex rally for 2nd day, gain nearly 1% each; small-caps rebound sharply

Stock Market Today: Indian markets closed higher for the second consecutive trading session on Wednesday, January 29, driven by strong buying in IT and banking stocks. Additionally, value buying in the broader market contributed to the positive momentum. The drop in crude oil prices also helped the bulls maintain control of the market during the session.

The Nifty 50 ended 213.50 points higher, or with a 0.93% gain, at 23,170, while the BSE Sensex finished the session at 76,583, up 0.90% (or 682 points) from Tuesday’s close. The broader market rebounded sharply, with the Nifty Midcap 100 index gaining 2.32% to 52,724, and the Nifty Smallcap 100 index ending the session even higher, with a gain of 3.32% at the 16,540 level.

The sharp correction in the broader market in recent sessions has sent many stocks into oversold territory, leading to some pullback in trade. Twenty-five constituents of the Nifty Smallcap 100 ended the session with gains ranging from 5% to 20%. Inox Wind emerged as the top gainer with a 20% gain, followed by Gujarat Mineral Development with a 13% gain.

Likewise, in the midcap space, CG Power and Industries ended the session with a 9% gain, followed by KPIT Technologies and Persistent Systems, with returns of 8.8% and 6.2%, respectively.

Commenting on today’s market performance, Vinod Nair, Head of Research, Geojit Financial Services, said, “The Indian market has demonstrated resilience in anticipation of the upcoming Union Budget, with expectations of measures aimed at stimulating consumption and job creation. Small and mid-cap stocks experienced a relief rally, while key index valuations are trading at a 5-year average, which appears attractive given the strong long-term domestic outlook. Investors are now focusing on the upcoming FOMC meeting, with general expectations that the Fed will maintain its current hawkish stance.”

IT stocks see significant recovery

Indian IT stocks bounced back strongly in today’s session following Wall Street’s tech-led rebound on Tuesday after a sell-off, which was sparked by concerns over a cheap artificial intelligence model from Chinese startup DeepSeek.

The Nifty IT index gained 2.62%, reaching 42,914.50 points. Today’s rise also marked the biggest intraday jump since January 10. All 10 constituents of the index ended the session in positive territory.

Domestic brokerage firm, Motilal Oswal in its latest report said that Indian IT companies stand to benefit from the rise of cost-efficient AI platforms like DeepSeek’s R1 model.

“While most stock prices for most chip makers have reacted negatively as this implies much lower compute than earlier anticipated, we believe this could shift focus from capex to cost efficient AI platforms, possibly benefitting Indian IT,” said the brokerage.

Meanwhile, investors’ focus has now shifted towards the Federal Reserve’s rate decision, due later in the day. With the central bank expected to keep interest rates steady, attention will be on Fed Chair Jerome Powell’s speech and how the central bank will respond to President Donald Trump’s calls for interest rate reductions. Notably, this is the first Fed meeting after Donald Trump took charge as U.S. President for his second term.

Nifty 50: Technical Outlook 

Rupak De, Senior Technical Analyst at LKP Securities said, “The Nifty moved up, shrugging off two days of weakness. Though sentiment has improved slightly, overall weakness is likely to persist as the index remains below the 21EMA. On the lower end, 23,000 is likely to act as immediate support, and a fall below this level might trigger panic in the market. However, above 23,200, the Nifty could gather more strength.”

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.