METAL’S MELTDOWN MAY SHOW GREENERY IN NIFTY PRIVATE BANK’S MAY OUTPERFORM

It’s been a haunted last week for the precious metals where Gold corrected nearly 17% from its recent highs of 180779 to hit a low of 149075 a biggest decline in a single week in history followed by Silver which made highs of 420048 & gave a vertical dive towards 291925 a single-handed fall of nearly 30.51% a biggest fall in the history.

Though this meltdown has made precious metal investors hopeless but a ray of hope has arisen as once an asset class crashes investors seek shelter to another asset class which basically here is Equity. This melt down may result in inflow into the Capital markets gradually.

Nifty last week rise back from its recent low’s of 24919.80 to hit a high of 25455.40 to give a decisive close at 25320.60. Last week FII’s has done relatively nominal selling of nearly Rs. 730.83 cr. while DII’s continued to buy into the domestic equity markets with net buying of Rs. 14,398.03 cr. which led Nifty to regain the strength which has been missing since long. Its budget week so Nifty continued to have its crucial support within our pre-defined levels of 24500-24800 kind of levels while on the upside immediate hurdle still lies at 25580-25800 kind of levels. Any side breach could lead us towards fresh ranges but till then its purely wait & watch scenario.

This week its purely based on domestic Budget factors rather than any influential outside issues. Precious metals meltdown may have positive impact over here but Budget may or may not have any major impact on the broader trading range of the markets.

Though rupee fall has been a big issue lately but if things get back in favor broader market may try to follow up the positive momentum but moreover reality may often a wait & watch scenario.

FII’s have been into net sell in 7 months out of 10 in current Fiscal year 2025-26 creating ruckus pressure on the entire markets. In the traders / investors community it has now become a basic question why they are selling? & When this selling would stop?

Why FII’s are continuously selling in Indian Markets?

In recently launched GDP growth rate of India in Q2 has been 8.20% while it is being projected that it will grow at 7.30% in the Fiscal year 2025-26 while USA has recently shown a GDP growth rate of 4.40% which is furthermore projected to grow at 4.70% so for a Developed economy which is showing nearly 5% of growth lately whereas target country which is still a Developing country with a projected growth rate of 7.30% but its currency is declining on a fast scale why would any institutions go for a Emerging Markets when it can get a growth of nearly 5% in an already developed nation while saving currency devaluation risk. Isn’t it a safer investment for them?

Well, ofcourse yes this could have been a major reason for FII’s to relentlessly sell into the Indian Equity markets.

Having said that recent conflict of US with Venezuela & US-Iran conflict still may or may not affect the domestic Equity markets further but Brent crude oil may continue to get effected as it tested 70.58$ per barrel. However, this month has upcoming Budget on 1^st of February 2026.

Meanwhile possibility of support rising from “IT Sector” followed by certain Private sector heavy weight banks like HDFC Bank & ICICI Bank may come while “Reality Sector” may support the broader move towards the bullish zone in the coming week ahead. However, budget specific sectors may also remain into the limelight (Budget specific Sectors & Stocks are covered in separate article this week).

On the other hand, Bank Nifty may show major upside only above 60500 while on the downside its crucial support now lies at 57000 kind of levels. Likewise Private heavy weight banks this time may show some relief rally while PSU Banks may remain sideways for a while.

Last week IT sector has shown recovery from low’s with marginal volatility may now show momentum towards 40000 & above kind of levels. On the lower side 37000 now remains as an immediate crucial support levels while on the upside immediate target still remains at 40000 & above kind of levels with potentially positive bias expectations from the giant’s positive momentum.

The institutional investors FII’s remained marginal seller with net sell of Rs. 730.83 cr. worth of equities while DII’s remained net buyers with massive buying of Rs. 14,398.03 cr. FII’s remained net sellers so far in the month of January 2026 with net outflow of Rs. 41,435.22 cr. while DII’s once again remains massive buyers so far with net inflow of Rs. 69,220.74 cr. for the month. DII’s remains main supporter of the Indian Equity markets in January 2026 month.

We clearly mentioned earlier that Nifty’s pressure only resembles the pressure of political will rather than fundamental one. FII’s selling has kept its pressure intact to the Indian domestic Equity markets as it went lesser last month the real realization came forward & now the Indian markets growth story rises & the politically backed selling with pressure from the Trump administration to diminish the Indian markets & create an artificial pressure to put an end to the Indo-Russia friendship remains untouched.

India remained on the higher ground on GDP data front where it achieved a milestone with historic growth rate of 7.80% in Q1 & 8.20% in Q2 of FY 25-26 completely mocking Trump’s “Dead Economy” jibe at its face where India remained on the Top-notch developing economy set for a target of $25 Trillion economy by 2047 on track. However, chairman of Reliance Industries Limited Mr. Mukesh Ambani said in its latest AGM last week that India has the capacity to achieve 10% GDP growth annually which once again has set another long-lasting futuristic goal for the entire economy.

FII & DII’s monthly data so far in the FY 2025-26 has been interesting where FII’s bought in few months initially then abstain from buying or remained to being on the sell side while DII’s remained the biggest supporter of the broader markets. The data below mentioned:

Brent Crude as earlier anticipated hit 68$ per barrel & above towards 70.53$ per barrel we now remain neutral from hereonwards.

However, in Nifty we have previously mentioned that Nifty in the last five months mainly March-April-May & so far in June 2025 shown immense strong rally from the lower levels of 21743.65 to testing high’s of 26372.80 in January 2026 came a long way of recovery almost 20% from the lower levels forming consecutive 4 bullish candles on monthly charts which suggests the continuation of bullish move ahead in the month of June as well as in July followed by massive growth in India’s Q1 GDP of 7.80% & Q2 GDP of 8.20%.

The Indian Equity markets have gained many recent news items where major of the news items are mentioned below:

• Rupee hit all time low of 92.239 & we expect 91-90 levels to hit in February series on the upside.

• Dollar Index last week hit low of 95.55. it may now head for 98-99 in February series.

• Brent Crude as earlier anticipated hit 68$ & made high of 70.53$ we now remain neutral from hereonwards for the week.

On the other side FII’s net longs now near to 12-14% & stayed stable with consistent recovery as of now which signifies minimum downside while potential upside could be remains at large which continuously signifies & now support could be within the range of 24500-24800 in Nifty. Now we expect the FII’s long positions to rise further towards 22%-36% in the coming months ahead which may take Nifty & broader markets again on the higher levels.

In the wholesome broader markets witnessed some key events & their outcomes last week which are described as follows:

Domestic News:

1. PM Narendra Modi has confirmed the signing of the historic India-EU Free Trade Agreement (FTA). Dubbed the “mother of all deals,” it was finalized on January 26-27, 2026, after nearly two decades of negotiations, boosting trade, investment, and economic ties between India and the 27-nation EU bloc.

2. The Bombay High Court has granted an ad-interim stay on substantial Goods and Services Tax (GST) demands exceeding ₹10,000 crore that had been raised against a group of insurance companies in relation to co-insurance premium and ceding commission transactions.

3. AI and Labor Markets: A new report highlights that the UK is suffering the steepest AI-related job losses among major economies, while Asian markets like Japan and Australia are seeing a more balanced mix of job displacement and new role creation.

4. Kumar Mangalam Birla announced that Vodafone Idea (Vi) has overcome years of uncertainty following the AGR dues resolution. For the first time, “the fog has cleared,” enabling the telecom firm to shift from survival mode to sustainable growth, backed by government support and improved finances.

5. Adani-Embraer Deal: Adani Group and Brazilian planemaker Embraer have signed an MoU to assemble commercial aircraft in India, furthering the “Make in India” initiative in the aviation sector.

6. Reliance-ONGC Pact: Reliance Industries and ONGC signed a Memorandum of Understanding (MoU) at India Energy Week to share offshore resources, including supply vessels, to improve operational efficiency

7. Budget Session Commences: The Budget Session of Parliament for 2026–27 begins today with President Droupadi Murmu’s address to a joint sitting of both Houses. Finance Minister Nirmala Sitharaman is scheduled to present the Union Budget on February 1

8. Gold and Silver Crash: In a dramatic shift, silver prices plummeted by ₹24,000/kg, falling below the ₹4 lakh mark. Gold also saw a sharp decline of ₹10,000 per 10 grams. This follows a period of record-high surges earlier in the month.

9. “Government Company” Definition: A major proposal suggests amending the definition of a government company to allow the state to reduce its stake to as low as 26% in listed firms like ONGC and SBI to promote professional management.

10. Foreign Outflows: Foreign investors withdrew a record $19 billion from Indian equities in 2025, a trend that has continued into January 2026.

11. Adani Group Legal Woes: Adani Group stocks in India saw further declines (up to 13%) following reports that the U.S. SEC is seeking court permission to personally email summons to Gautam Adani and his nephew, Sagar Adani, regarding an ongoing fraud investigation.

 International news:

1. India and the EU have finalized a landmark Free Trade Agreement on January 27, 2026, marking a historic milestone in their partnership. For the first time, the Presidents of the European Council and European Commission attended India’s Republic Day as chief guests, strengthening ties in trade, defense, and strategy amid global shifts.

2. According to Axios, US Senator Ted Cruz told donors he is “battling” the White House to secure acceptance of a trade agreement with India. Cruz said resistance has come from Peter Navarro, J.D. Vance, and at times Donald Trump.

3. Tariff Volatility in South Korea: The South Korean Kospi index saw heavy fluctuation, opening lower before recovering to a 1.9% gain. This follows President Trump’s threat to hike tariffs on South Korean goods to 25%, citing the country’s failure to codify a previous trade agreement.

4. HSBC’s Wealth Pivot: HSBC announced it will close its iconic Raffles Place retail branch in Singapore on February 28. The bank is shifting its strategy to focus on high-net-worth clients by opening a dedicated wealth center in the same building.

5. Tech Earnings Watch: Global attention is turning to the “Magnificent Seven” earnings and the Federal Reserve’s policy decision due Wednesday, which will test the durability of the current AI-driven market rally.

6. The Cause: The United Forum of Bank Unions (UFBU) is demanding the immediate implementation of a five-day work week

7. The United Forum of Bank Unions (UFBU) called for a strike to demand the immediate implementation of a five-day work week.

8. Trump on Cuba: President Donald Trump stated that Cuba is “failing” after the U.S. military seizure of Venezuelan President Nicolás Maduro led to a halt in oil and financial support to the island.

9. BofA’s Bull & Bear Indicator continues to flash a SELL signal for U.S. equities. The index has edged down slightly to 9.2, but remains near its highest level since February 2018, indicating extreme bullish positioning and elevated risk of a market correction

10. MSCI Asia Pacific Index: The regional benchmark rose 0.7%, setting a new all-time high. The rally was driven by “diversification bets” as investors pivoted away from the US dollar, which hit its lowest level in nearly four years due to concerns over policy unpredictability in Washington.

11. De-escalation in Minnesota: Following national backlash over two fatal shootings involving federal immigration agents in Minneapolis, Trump announced his administration would “de-escalate a little bit” to calm the situation

Last week Nifty made high of 25455.40 to give a close at 25320.65. Nifty last week rise back from its recent low’s of 24919.80 to hit a high of 25455.40 to give a decisive close at 25320.60. Last week FII’s has done relatively nominal selling of nearly Rs. 730.83 cr. while DII’s continued to buy into the domestic equity markets with net buying of Rs. 14,398.03 cr. which led Nifty to regain the strength which has been missing since long. Its budget week so Nifty continued to have its crucial support within our pre-defined levels of 24500-24800 kind of levels while on the upside immediate hurdle still lies at 25580-25800 kind of levels. Any side breach could lead us towards fresh ranges but till then its purely wait & watch scenario.

This week its purely based on domestic Budget factors rather than any influential outside issues. Precious metals meltdown may have positive impact over here but Budget may or may not have any major impact on the broader trading range of the markets.

Though rupee fall has been a big issue lately but if things get back in favor broader market may try to follow up the positive momentum but moreover reality may often a wait & watch scenario.

Meanwhile possibility of support rising from “IT Sector” followed by certain Private sector heavy weight banks like HDFC Bank & ICICI Bank may come while “Reality Sector” may support the broader move towards the bullish zone in the coming week ahead. However, budget specific sectors may also remain into the limelight (Budget specific Sectors & Stocks are covered in separate article this week).

Sensex made high last week at 82688.19 to give a close at 82269.78. Sensex may find its crucial support within the lower levels of 80000-81000 kind of levels while on the upside 85000-86000 remains as an immediate hurdle zone as of now.

On the other hand, Bank Nifty may show major upside only above 60500 while on the downside its crucial support now lies at 57000 kind of levels. Likewise Private heavy weight banks this time may show some relief rally while PSU Banks may remain sideways for a while.

Nifty Financials may find its immediate hurdle at 28100 kind of levels while on the downside immediate crucial support now lies at 26000 kind of levels.

Last week IT sector has shown recovery from low’s with marginal volatility may now show momentum towards 40000 & above kind of levels. On the lower side 37000 now remains as an immediate crucial support levels while on the upside immediate target still remains at 40000 & above kind of levels with potentially positive bias expectations from the giant’s positive momentum.

As of January 2026 the number of Demat Accounts has hit whopping 21.6 crores this not only helps the capital markets directly but also directly to Equity investments.

The monthly SIP in Indian markets now raised towards Rs. 31,002 cr. per month as on December 2025.

Brief Levels of Nifty / Sensex/ Bank Nifty / Nifty Financials / Nifty IT:

Nifty CMP:  25320.65
Nifty Potential Immediate Target / Hurdle: 25580-25800
Nifty Immediate Downside Support: 24500-24800

Sensex CMP: 82269.78
Sensex Immediate Hurdle: 85000-86000
Sensex Immediate Crucial Support: 80000-81000

Bank Nifty CMP:  59610.45
Bank Nifty Immediate Hurdle: 60500
Bank Nifty Immediate Downside: 57000

Nifty Financial CMP: 27330.85
Nifty Financial Immediate Hurdle: 28100
Nifty Financial Immediate Downside Support: 26000

Nifty IT CMP: 38036.15
Nifty IT Immediate Target: 40000+
Nifty IT Immediate Crucial Support: 37000

Stock on Radar:

Large Caps:

• DLF (CMP 635): This large-cap Reality counter has been on oversold levels now & looks good to add here at CMP 635 & on further decline towards 600 with strict SL placed at 550 for a potential upside towards 800 in 3 months’ time frame.

• United Breweries (CMP 1468):This large-cap has seen too much sell of towards in recent month looks like on crucial support. If hold 1300 (SL) then a pull back towards 1700 can be seen from CMP 1468 kind of levels.

• Manappuram Finance (CMP 285):This stock has rallied only due to gold & now gold has fallen then this counter may show some cool off towards 250 with strict SL towards 320.

• Tata Steel (CMP 193):This large-cap metal counter looks like may show some retracement from these levels of 193 towards 170 with strict SL placed at 205.

About the Author:

Mr. Vishal Gupta a SEBI Registered Research Analyst is the founder of “VG STOCK RESEARCH”, founder of “THE ANALYSIS ROOM”, a writer & an advisor having rich experience in Indian Equity Markets who has spent years comprehending an industry wide shift and risk management with more than 13+ years exploring in depth analysis of the Equity & Derivatives.

He has also been into teaching Fundamental Analysis for quite some time giving investors/traders comprehensive knowledge & skills of Indian Equity Markets.

Email I’d: contact@vgstockresearch.com
Contact: +91-9953934544
Website: https://vgstockresearch.com/
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