The Indian stock market witnessed its fifth consecutive session of decline on Friday, January 9, as investor sentiment remained cautious amid US tariff worries and anticipated Q3 earnings season. The Sensex dropped 605 points or 0.72% to close at 83,576.24, while the Nifty 50 shed 194 points or 0.75% to finish at 25,683.30. Broader market indices reflected similar weakness, with the BSE Midcap index declining 0.90% and the Smallcap index plunging 1.74%. Despite this bearish trend, Choice Broking's Executive Director Sumeet Bagadia has identified five breakout stocks presenting potential investment opportunities.

Market Outlook and Technical Analysis

Nifty 50 Performance

According to Bagadia, the Nifty 50 opened weak and extended its decline throughout the session, indicating persistent selling pressure and bearish sentiment. The index briefly breached the key support level of 25,800.00 and confirmed a decisive breakdown below this zone, eventually closing at 25,683.00, reinforcing the short-term bearish bias.

The daily RSI at 38.55 continues trending lower, reflecting deteriorating momentum and lack of buying strength. India VIX increased by 3.07% to 10.92, suggesting marginal pickup in volatility and cautious market sentiment. Bagadia noted that as long as Nifty holds above 25,600.00, a selective buy-on-dips strategy may be considered with strict stop-losses at 25,500.00.

Bank Nifty Analysis

The Bank Nifty opened flat but witnessed a sharp bearish move of nearly 590 points, registering an intraday low at 59,154.00. This price action suggests the index is undergoing a short-term consolidation-to-correction phase after recent gains. Immediate resistance is placed in the 59,500.00-59,600.00 zone, while the 59,000.00-58,900.00 support band remains critical for maintaining near-term stability.

Recommended Breakout Stocks

Bagadia has identified five breakout stocks that have moved past their established support or resistance levels, potentially signaling strong price movements ahead.

CCL Products (India)

CCL Products has recently delivered an upside breakout from a five-day sideways consolidation, indicating improving strength. The stock has also achieved a falling trendline breakout and continues trading above its key 100 and 200 EMAs, reflecting downside support.

KSB Limited

KSB has consolidated in a sideways range before delivering a breakout with strong close above the previous seven trading sessions' range. The RSI at 51.49 signals improving momentum, with immediate support near ₹750.00 aligned with the 20-day EMA.

HCL Technologies

HCL Technologies has taken strong support after a recent decline and staged a sharp upside move. The stock trades above its key 20, 50, 100, and 200 EMAs, indicating a positive trend. A breakout above the previous lower high signals trend reversal.

Endurance Technologies and Ramco Cements

Endurance Technologies has seen accumulation at lower levels and continues trading above its 200-day EMA, forming a strong base. Ramco Cements shows strength after delivering a falling trendline breakout, forming higher highs and higher lows on the 1-hour timeframe with RSI at 63.04 reflecting rising momentum.

Risk Management Strategy

All recommendations come with disciplined risk management protocols, including specific stop-loss levels to protect against downside risks. Bagadia emphasizes the importance of appropriate risk management despite identifying these breakout opportunities in the current market environment. Investors are advised to consider these technical recommendations alongside their individual risk tolerance and investment objectives.

Indian equity markets faced significant headwinds last week, recording their steepest decline since mid-September as multiple external factors converged to dampen investor sentiment. The broad-based sell-off reflected growing concerns over trade tensions and foreign capital outflows, setting a cautious tone for the week ahead.

Market Performance and Key Pressures

Both benchmark indices suffered substantial losses during the trading week, with investor sentiment impacted by elevated geopolitical tensions and fresh tariff warnings from US President Donald Trump on Indian imports. The market pressure was further amplified by continued foreign institutional investor selling.

Ponmudi R, CEO of Enrich Money, explained that the proposed US tariff measures, largely linked to countries continuing to purchase Russian oil, remain a key near-term overhang for Indian markets. He noted that since late 2025, benchmark indices have experienced intermittent corrective phases of 5-8%, with export-oriented sectors such as IT, pharma, and select midcaps bearing the brunt of the pressure.

Economic Impact Assessment

Analysts have quantified the potential economic implications of the tariff threats, providing investors with concrete impact estimates. Ponmudi highlighted that estimates of the potential tariff impact on GDP for FY26 range between 0.5% and 0.7%, depending on the final scope of implementation and any countermeasures.

Despite these challenges, several factors continue to provide market support:

• Strong domestic consumption trends
• Resilient services exports performance
• Trade diversification toward the EU, ASEAN, and Middle East markets
• Controlled rather than panic-driven FPI selling patterns

Q3 Earnings as Market Catalyst

Market focus in the coming week will shift to third-quarter earnings from India Inc., with heavyweight IT companies expected to drive index-level direction. The earnings calendar features several major technology firms whose results will be closely scrutinized for broader market implications.

Investor attention will focus on several critical areas during earnings announcements:

• Trends in client IT budgets for the current year
• Signs of recovery in discretionary spending across industries
• Hiring plans, especially given tighter H-1B visa approvals
• Updates on progress in AI-led technologies and infrastructure development

Broader Market Triggers

Beyond corporate earnings, several macroeconomic indicators will influence market sentiment throughout the week. Ponmudi emphasized that key inflation and growth indicators will shape global risk appetite, with India's December CPI, WPI food, and manufacturing inflation data scheduled for release.

Vinod Nair, Head of Research at Geojit Investments, noted that the week began on a muted note as expectations of higher government borrowing drove bond yields upward, though strong GST collections and healthy bank credit growth provided some support. He pointed out that global headwinds include the Venezuela-US standoff, concerns over Russian oil imports, and China's restrictions on rare earth exports.

Market Outlook and Expert Perspectives

Analysts expect continued volatility in the near term, particularly affecting US-exposed companies and sectors such as metals and oil & gas. However, strong domestic fundamentals, resilient GDP growth, and robust credit trends could support selective buying opportunities where earnings prospects remain favorable.

Vinod Nair concluded that markets are expected to stay range-bound with a mixed bias, seeking balance between external risks and domestic fundamentals. Any positive outcome from India-US trade discussions or easing tariff concerns could potentially spark a short-term rebound, making diplomatic developments a key factor to monitor alongside corporate earnings performance.