Indian equity markets broke their five-day losing streak on January 13, staging a remarkable recovery to close near session highs. The rally was fueled by renewed optimism around India-US trade deal prospects and the commencement of the Q3 earnings season, which helped investors regain confidence after recent market weakness.

Market Performance and Recovery

The market witnessed significant volatility during the trading session, with both benchmark indices experiencing sharp swings before settling in positive territory.

Nifty demonstrated remarkable resilience, recovering over 300 points from its intraday low after falling below the crucial 25,000 level. Both indices declined nearly 0.90% during the session before mounting a strong comeback to gain as much as 0.50%.

Q3 Earnings Season Begins

The IT sector took center stage as major companies reported their Q3 FY26 results, setting the tone for the broader earnings season.

TCS Q3 FY26 Results

Tata Consultancy Services delivered numbers largely in line with estimates, though profit margins faced pressure from regulatory changes.

Key highlights from TCS results include:

• New labor codes and legal claims impacted profits by ₹3,391 crore
• Revenue growth in constant currency terms at 0.8% versus 0.6% in Q2
• Bumper dividend announcement of ₹57 per share, including ₹46 as special dividend
• Q3 annualized AI revenue reached $1.8 billion, up 17.3% QoQ in constant currency
• Deal wins remained strong at $9.3 billion versus $10 billion in Q2

HCL Technologies Q3 FY26 Performance

HCL Technologies beat revenue estimates but faced profit headwinds similar to TCS.

Notable developments included:

• One-time impact of new labor codes reduced profits by ₹956 crore
• Service revenue guidance upgraded to 4.75%-5.25% from 4%-5%
• HCL Software business grew 28.1% while IT business increased 1.5% QoQ
• Total Contract Value reached $3 billion, up 17.0% QoQ

Major Corporate Developments

Several companies announced significant business developments and strategic initiatives.

Key Business Announcements

Other Notable Updates

• Anand Rathi reported PAT growth of 29.61% YoY to ₹100.19 crore with AUM reaching ₹99,008 crore
• Kalpataru posted pre-sales of ₹870 crore, down 14% YoY, while collections grew 17% to ₹1,101 crore
• Adani Energy installed 18.88 lakh meters with smart metering revenue potential at ₹29,519 crore

Market Outlook and F&O Activity

Nifty January futures closed at 25,880, trading at a premium of 90 points with open interest increasing by 1.7%. Options data showed maximum call open interest at 26,000 and maximum put open interest at 25,500, indicating key resistance and support levels for upcoming sessions. The strong recovery from intraday lows suggests renewed investor confidence, though market participants will closely watch upcoming earnings announcements and global trade developments.

Indian equity markets staged a strong recovery on Monday, breaking a five-session losing streak as investor sentiment improved following positive developments in India-US trade relations. The late-afternoon rebound came after the incoming U.S. ambassador to India announced that bilateral trade discussions would begin on January 13.

Market Performance

Both benchmark indices posted solid gains, recovering from early losses to close in positive territory.

Sectoral Performance and Market Drivers

The commodities segment emerged as the top performer, with metals stocks leading the charge. According to Vinod Nair, Head of Research at Geojit Investments, the metals sector benefited from renewed buying interest during supply constraints. Value buying was also evident in consumer and banking stocks, as investors sought opportunities after recent corrections, supported by expectations of stronger Q3 earnings and improving demand.

Precious metals maintained their upward momentum amid persistent geopolitical tensions, adding to the overall positive market sentiment.

Technical Analysis

From a technical perspective, the strong buying near the day's low led to a smart recovery. Rupak De, Senior Technical Analyst at LKP Securities, noted that on the daily chart, the Nifty has formed a piercing line pattern, suggesting the possibility of a bullish reversal after several days of selling pressure. On the hourly chart, the RSI has moved out of the oversold zone, indicating early signs of recovery.

However, analysts remain cautious about the sustainability of this recovery. The Nifty faces resistance in the 26,000-26,100 zone, where selling pressure may re-emerge. On the downside, immediate and crucial support is placed at 25,650.

Market Activity and Stock Performance

Trading activity remained robust across various segments:

Most Active Stocks by Value:

• Hindustan Copper: ₹2,805 crores
• BSE: ₹2,121 crores
• HDFC Bank: ₹1,974 crores
• ICICI Bank: ₹1,539 crores
• IFCI: ₹1,485 crores

Most Active Stocks by Volume:

• Vodafone Idea: 103.7 crore shares
• IFCI: 27.3 crore shares
• YES Bank: 11.37 crore shares
• Ola Electric Mobility: 9.95 crore shares

Stocks that witnessed strong buying interest included IFCI, Force Motors, Hindustan Copper, BSE, Premier Energies, Power Finance Corp, and Hindustan Zinc. Conversely, selling pressure was evident in Tejas Networks, City Union Bank, GE Vernova T&D India, and Signatureglobal India.

Market Breadth

Despite the benchmark indices' positive performance, market breadth remained bearish. Out of 4,485 stocks traded on BSE, 2,837 stocks witnessed declines while 1,468 saw advances, and 180 stocks remained unchanged. Over 82 stocks hit their 52-week highs, including Phoenix Mills and Alkem Labs, while 532 stocks slipped to their 52-week lows.