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Volatility drags Nifty below 25700 bases; Eyes on Q3 earnings!

ICICIdirect Research 09 Jan 2026 DISCLAIMER

Indian equities snapped two weeks winning streak and settled volatile week on a subdued note. Nifty underperformed its global peers and settled the week at 25700, down 2.5%. Broader market mirrored the benchmark weakness, with most sectors ending in red- Oil & Gas, Power and metal, leading the dragged. Only defense managed to buck the trend

Key Highlight

  • Contrary to our expectations, the Nifty slipped below the positive gap area of 25,700 mark coincided with the 50 days EMA for the first time in three months, signaling a pause in upward momentum amid profit booking in key index heavyweights.  

What we expect:

  • The emerging pattern of lower highs and lower lows points to a corrective bias, with the next support base now seen at 25,300. For a meaningful pullback to materialize, a decisive close above previous session high is a pre-requisite.
  • In the upcoming week, we expect volatility to remain elevated tracking geopolitical worries, start of Q3 earnings, clarity on US-India Trade Deal.
  • Since Oct 2025, index has arrested multiple intermediate corrections ~3%. Subsequently, such correction offered incremental buying opportunity. In the current scenario, the index has already corrected ~2.8% that hauled daily stochastic oscillator in oversold territory.

Key Monitorable:

  • Outcome of US Supreme court ruling on President Trump’s Global Tariff policy
  • Inflation print: US and India

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