Indian equity markets demonstrated remarkable resilience on January 12, 2026, staging a sharp V-shaped recovery that broke a five-session consecutive sell-off. The Nifty 50 rebounded strongly from crucial support levels, while Bank Nifty formed encouraging technical patterns despite facing resistance at higher levels. Market sentiment received a boost from supportive global cues, particularly renewed optimism around India-U.S. trade talks following remarks by newly appointed U.S. ambassador to New Delhi, Sergio Gor, on continued bilateral engagement with fresh discussions scheduled for January 13.

Nifty 50 Technical Analysis

The Nifty 50 experienced significant volatility during the session, initially coming under selling pressure in early trade and slipping below the 25,500 mark. The index briefly breached its 100-day EMA before marking an intraday low at 25,473, where strong buying interest emerged near this critical demand zone.

The recovery appears largely driven by gradual short covering, indicating the move is corrective in nature rather than a confirmed trend reversal. While momentum indicators remain broadly bearish, the 100-day EMA acted as crucial support and helped initiate the bounce. The index successfully reclaimed levels above the previous close and is now attempting to stabilize around the 25,750-25,800 zone.

Bank Nifty Performance and Patterns

Bank Nifty opened on a flat note near 59,233 but failed to sustain higher levels, coming under selling pressure during the early part of the session. The index traded below its falling trendline for most of the day, maintaining a cautious intraday structure.

Selling pressure initially dragged Bank Nifty towards the 59,000 support zone, where strong buying interest emerged. This led to a sharp intraday rebound, resulting in the formation of a bullish hammer candle on the daily chart. This pattern indicates a clear rejection of lower levels and signals a potential short-term reversal from the bottom of the support zone.

Market Outlook and Key Levels

Despite the recovery, both indices face significant resistance levels that need to be overcome for sustained upward momentum. The recovery in Bank Nifty remained corrective and faced rejection near the 59,700 zone, aligning with the declining trendline resistance.

Bank Nifty Key Levels:

• Immediate Resistance: 59,600, followed by 59,900
• Immediate Support: 59,000, followed by 58,800
• Critical Level: Sustained move above 59,600 needed for bullish continuation

Market Sentiment: Intraday sentiment has turned neutral to mildly positive for Nifty 50, though the broader undertone continues to remain cautious. For Bank Nifty, while downside risk has reduced, a confirmed trend reversal is yet to be established. As long as the index trades below the falling trendline, the broader bias remains cautious, with markets likely to remain range-bound while awaiting further confirmation.

India's equity markets are witnessing unprecedented selling pressure as the Nifty 50 index records its worst start to a new year in a decade. The benchmark index has declined 2.50% in the first eight sessions of 2025, continuing a troubling pattern of negative market performance at the beginning of calendar years.

Market Capitalization Losses

The scale of the market decline becomes evident when examining the broader impact on market capitalization. BSE-listed companies have collectively lost approximately ₹20.00 lakh crore in market value from the January 2 peak this year.

This marks the third consecutive year that Indian equity markets have witnessed a negative start to the calendar year, highlighting the challenging environment facing investors.

Individual Stock Performance

The broad-based nature of the decline is reflected in individual stock performance, with 30 out of the 50 Nifty constituents delivering negative returns during this period. Several major companies have experienced significant declines that have impacted their market valuations substantially.

Banking Sector Impact

HDFC Bank's performance deserves particular attention, as the banking giant witnessed its worst week since January 2024. The decline resulted in the bank losing over ₹1.00 lakh crore in market capitalization, representing a substantial erosion in shareholder value for one of India's largest private sector banks.

Global Market Comparison

When viewed in the context of global market performance, the Nifty's struggles become more pronounced. The index delivered just 5.00% returns in US Dollar terms compared to other global markets, which gained between 20.00% to as high as 70.00% during the same period. This performance gap places the Nifty among the worst-performing markets globally in 2025.

The current market environment reflects the challenges facing Indian equities, with sustained selling pressure affecting both individual stocks and broader market indices. The combination of significant market cap losses and poor relative performance against global peers underscores the difficult conditions prevailing in the domestic equity market.