• The Indian stock market closed higher on Tuesday, with easing fears about the HMPV virus.
• The Sensex and Nifty both saw gains, with positive performance in various sectors.
• Market experts attribute the recovery to positive global cues and lack of major concerns about HMPV.
• Despite the positive close, the market is expected to remain cautious in the near term, with investors closely monitoring global trends and upcoming earnings.

The Indian stock market ended on a positive note on Tuesday as fears surrounding the HMPV virus began to subside. The domestic benchmark indices closed higher, buoyed by positive global cues and buying in various sectors including metal, media, energy, commodities, PSU bank, financial service, pharma, and FMCG. The Sensex ended at 78,199.11, up by 234.12 points or 0.30 per cent, while the Nifty settled at 23,707.90, up by 91.85 points or 0.39 per cent.

The Nifty Bank ended at 50,202.15, up by 280.15 points, or 0.56 per cent. The Nifty Midcap 100 index closed at 56,869.3 after rising 502.35 points, or 0.89 per cent, while the Nifty Smallcap 100 index closed at 18,673.45 after rising 248.20 points, or 1.35 per cent. On the Bombay Stock Exchange (BSE), 2,627 shares ended in green and 1,356 shares in red, with no change in 103 shares.

Market experts noted that amid positive global cues indicating no major concerns regarding HMPV, the domestic market partially recovered from the previous day's sharp sell-off. However, the market traded within a range ahead of the critical first advance estimates for India's FY25 GDP.

Sectoral Performance and Market Expectations

In the near term, the market is expected to remain cautious, awaiting signs of earnings recovery during the upcoming result season. The market is also dealing with ongoing FII selling, driven by the strengthening dollar, rising US bond yields, and reduced expectations of further rate cuts.

On the sectoral front, auto, IT and consumption segments were major losers. In the Sensex pack, Tata Motors, ICICI Bank, Asian Paints, Nestle India, UltraTech Cement, L&T, Adani Ports, Tata Steel, IndusInd Bank, Titan, Hindustan Unilever Limited, Sun Pharma and SBI were the top gainers. On the other hand, Zomato, HCL Tech, TCS, Tech Mahindra, Kotak Mahindra Bank, Infosys and Bajaj Finserv were the top losers.

Foreign institutional investors (FIIs) sold equities worth Rs 2,575.06 crore on January 6, while domestic institutional investors bought equities worth Rs 5,749.65 crore on the same day. As the market approaches critical support and resistance levels, investors are advised to monitor price action closely and adopt a cautious stance in the coming sessions.

Global Cues and Market Trends

Small-, mid-, and micro-cap stocks saw strong buying interest with the Nifty Smallcap 100 climbing 1.35%, the Nifty Midcap 100 rising 0.89%, and the Nifty Microcap 250 advancing the most, closing higher by 2.22%.

Equity markets this week will take cues from global trends, trading activity of foreign investors and quarterly earnings, with TCS kick-starting the results calendar. Macroeconomic data announcements and the rupee-dollar trend would also dictate market trends.

The frontline indices recovered in the holiday-thinned week, led by auto stocks after the earlier sharp drop made valuations relatively attractive. Both benchmarks gained about one per cent last week, after a five per cent slide in the week before that, the most in 30 months, after the US Federal Reserve projected fewer rate cuts in 2025 and tarnished the appeal for emerging markets.