Benchmark indices Nifty and Sensex opened higher on January 20, driven by gains in Kotak Mahindra Bank and Wipro, which boosted sentiment in banking and IT stocks. However, weakness in the auto and metal sectors tempered the rally. India VIX, a barometer to assess market anxiety, flared up nearly 8 percent to touch the 17 levels.

Global markets were buoyed by optimism following positive talks between Donald Trump and Chinese President Xi Jinping ahead of Trump’s inauguration. US markets closed the week on a high, supported by confidence in economic health and interest rate trends, as investors braced for policy changes under the new administration.

At about 9:20 am, the Sensex was up 106.17 points or 0.14 percent at 76,725.50, and the Nifty was up 17.95 points or 0.08 percent at 23,221.15. About 1711 shares advanced, 1055 shares declined, and 163 shares unchanged.

"This is largely driven by global cues, including gains in US and Asian markets. However, the focus remains on stock-specific movements due to the ongoing earnings season, with no major triggers ahead of the budget," Ruchit Jain, Vice President of Technical Research at Motilal Oswal said in an interaction with Moneycontrol. "Despite this positivity, concerns linger as foreign institutional investors (FIIs) continue to hold 85 percent of their index futures positions on the short side, and cash segment selling persists," he added.

The market appears oversold, as it is trading below the 200-day exponential moving average (200-DMA), which now acts as resistance in the 23,600–23,700 range. While pullback moves are possible, these are likely to face resistance, and any broader reversal will be led by large-cap stocks rather than mid- and small-caps.

Kotak Mahindra Bank shares were making headlines, rising 7 percent after it bagged a slew of upgrades from broking houses as analysts turned bullish on the bank following its positive earnings show for the October-December quarter (Q3) of the fiscal year 2024-25 (FY25). It reported a 10 percent rise in its net profit at Rs 4,701.02 crore for Q3FY25, compared to Rs 4,264.78 crore in the year-ago period, the lender said in an exchange filing.

Tech major Wipro shares also gained 8 percent after it delivered better-than-expected earnings for Q3, marked particularly by its continued margin improvement despite a seasonally weak quarter. The company's operating margins, which came at a three-year high in Q3 have garnered positive views from brokerages, with some upgrading their estimates for the IT player.

Dixon Technologies' share price gained 1 percent as the company is going to acquire the land and assets of KHY Electronic India. The company subsidiary IsmartU India has entered into a binding Memorandum of Understanding with KHY Electronic India whereby the subsidiary will acquire, land and building, machinery, and other tangible assets from KHY, for an amount of up to Rs 133 crore excluding applicable taxes.

The broader market, including mid- and small-cap indices, traded lower. Both indices remain significantly below their September peaks, with the Midcap index down 12 percent and the Smallcap index falling 11 percent. Many individual stocks have faced sharper corrections, dropping 25-40 percent. This decline is attributed to stretched valuations, slowing economic momentum, and underwhelming Q2 earnings.

Nifty Bank and IT index rose the most led by gains in Kotak Mahindra Bank and Wipro respectively. Nifty PSU Bank and Realty stocks opened in the green with gains of 0.4 percent each. Oil and Gas and consumer durable stocks also opened positively. Laggards including Nifty Auto and Pharma were in the red, albeit marginally.

"After a positive opening, Nifty can find support at 23,100 followed by 23,000 and 22,800. On the higher side, 23,300 can be immediate resistance, followed by 23,400 and 23,500," Hardik Matalia, Derivative Analyst at Choice Broking said. "The charts of Bank Nifty indicate that it may get support at 48,300 followed by 47,900 and 47,500. If the index advances further, 48,800 would be the initial key resistance, followed by 49,200 and 49,500," he added.

Kotak Mahindra Bank, NTPC, SBI, Reliance, and Britannia Industries were the major gainers on the index. Shriram Finance, SBI Life, Insurance, Tata Motors, Tata Steel, and Coal India were the major losers on the index.