The downside momentum in the market continued on Friday after a brief two-session bounce. The day began on a positive note, with the market consolidating during the early hours and recovering from intraday lows by mid-session. However, sharp weakness emerged after 12 pm, dragging the indices down toward the close. The market failed to hold its opening gains and ended the day sharply off the highs.

The Nifty50 index experienced volatile swings following a flat opening and eventually closed near the session’s low at 23,092.20. This decline was fuelled by relentless selling by foreign portfolio investors (FPIs) and lacklustre corporate earnings for the December quarter. Heavyweights such as HDFC Bank, Reliance Industries, and Mahindra & Mahindra were the key contributors to the index’s fall.

Friday’s session marked the third consecutive week of negative returns for the market, a streak not seen in the past three months. The Nifty erased gains from its previous two sessions and ended the week with a 0.48% loss, reflecting the weakening broader trend.

The broader market faced even more pressure, with the Nifty Midcap100 shedding 1.6% and the Nifty Smallcap100 plunging 2.4%. The midcap index gave up its Thursday gains, slipping 2% in a broad-based selloff.

Stocks like ICICI Bank, NTPC Green Energy, IDFC First Bank, Yes Bank, Macrotech Developers, DLF, JK Cement, among others will remain in focus as these companies declared their December quarter results after market hours on Friday.

In global developments, the Bank of Japan hiked interest rates by 25 basis points to 0.5%, bringing its policy rate to its highest level since 2008, as it seeks to normalise its monetary policy. On the other hand, US’ benchmark S&P 500 rose to a record high, while the other two indices gained for fourth day in a row after US President Donald Trump called for lower interest rates and cheaper oil prices.

Going ahead, domestic equities are expected to trade within a broad range with some volatility amidst the Q3 result season, unfolding of US President Trump’s economic policies and the Union Budget on Saturday (February 1, 2025). PSU and capex themed stocks such as railway, defence, capital goods will be in focus ahead of the Budget.

Foreign investors remained net sellers in the cash market adding pressure on the market performance on Friday, while domestic investors were net buyers.

What do the Nifty 50 charts indicate?

The near-term trend of Nifty remains weak, said Nagaraj Shetti of HDFC Securities. A slide below the immediate support of 22,975 levels could open the next downside towards 22,800 levels. Any upside bounce towards 23,350-23,400 could be a sell on rise opportunity.

According to Om Mehra of SAMCO Securities, the high of 23,427 and the low of 22,976, as marked by the daily candle on January 21, will serve as pivotal levels in the days ahead; A breakout beyond either side of this range could provide clarity on the emerging directional trend.

In the short term, the bears may maintain the upper hand as long as the index fails to surpass the 23,450 level. Any rise toward the 23,350–23,450 zone is likely to encounter selling pressure. However, the downside may remain limited unless the 23,000 level is breached, said Rupak De of LKP Securities.

What do the Nifty Bank charts indicate?

The Nifty Bank index ended the session at 48,367.80, recording a decline of 0.46%. After hitting a recent low of 47,898.35 on January 13, 2024, the index has been oscillating within an inverse saucer pattern, signaling a gradual weakening in momentum.

“The index remains below all key moving averages, highlighting the prevailing bearish outlook. The broader trend continues to appear weak, with no signs of base formation emerging yet. A critical resistance level stands at 49,650. Unless this level is decisively breached, any bullish outlook is likely to remain on hold, suggesting that recovery may take more time,” Mehra said.

What Are The F&O Cues Indicating?

Short covering was seen in these names on Friday, which means an increase in price but a decline in Open Interest:

Stock	Price Change	OI Change
IEX	1.14%	-13.23%
Grasim	1.28%	-11.96%
ACC	0.07%	-10.40%
Tata Power	0.14%	-10.17%
Laurus Labs	4.72%	-9.26%

Unwinding of long positions was seen in these stocks on Friday, meaning a decline in both price and Open Interest:

Stock	Price Change	OI Change
Marico	-0.47%	-4.45%
Tata Chemicals	-1.96%	-4.42%
HCLTech	-0.78%	-4.42%
Aditya Birla Capital	-2.62%	-4.40%
GNFC	-0.59%	-4.32%

These are the stocks to watch out for ahead of Monday’s trading session:

• ICICI Bank: Net profit up 15% to ₹11,792.4 crore, higher than estimates of ₹11,332.7 crore. Net Interest Income up 9.1% to ₹20,370 crore, marginally below poll of ₹20,461 crore. Gross NPA at 1.96% from 1.97% last year. Net NPA unchanged at 0.42% sequentially. NIMs at 4.25% from 4.27% last quarter and 4.43% last year.
• IDFC First Bank: Net profit of ₹339.4 crore, down 52.6% from last year and below poll of ₹475.7 crore. Net Interest Income up 14.4% from last year to ₹4,902 crore, in-line with poll of ₹4,952 crore. Gross NPA at 1.94% from 1.92% in September. Net NPA at 0.52% from 0.48% last quarter.
• Yes Bank: Net profit at ₹621.3 crore, higher than estimates of ₹538.9 crore. Net Interest Income up 10.2% to ₹2,223.5 crore, in-line with estimates of ₹2,258 crore. Gross NPA unchanged at 1.6%, net NPA unchanged at 0.5%.
• JSW Steel: Net profit down 71% to ₹719 crore but above poll estimate of ₹573 crore. Revenue flat at ₹41,378 crore, above expectations of ₹40,545 crore. EBITDA down 22.3% to ₹5,579 crore, above poll of ₹5,122 crore. EBITDA margin narrows to 13.5% from 17.1% last year but above poll of 12.6%.
• IndiGo: Net profit down 18.3% to ₹2,448 crore, below poll of ₹3,152 crore. Revenue up 13.7% to ₹22,110 crore, above poll of ₹21,909 crore. EBITDAR up 10.7% to ₹6,058.7 crore. Forex loss of ₹1,456 crore from loss of ₹51 crore last year. EBITDA$ margin at 27.4% from 28.1% last year.