Market Wrap

Indian equity markets witnessed a highly volatile week, with benchmark indices ending lower amid a mix of global uncertainty, inflationary concerns, and cautious investor sentiment. Markets started the week on a weak note following Prime Minister Narendra Modi’s weekend remarks, which kept traders defensive during the initial sessions. Although strong buying from lower levels helped indices recover part of the losses later in the week, Friday’s trade remained largely range-bound. The Nifty eventually closed the week down by more than 2%, slipping slightly below the 23,650 mark.

Sectorally, IT stocks emerged as the biggest rebounders after facing heavy selling pressure for three consecutive sessions. The recovery was largely driven by short covering and value buying from oversold levels, despite weak global tech sentiment. Broader markets also showed selective strength, indicating that investors continue to accumulate quality stocks even amid elevated volatility. However, overall risk appetite remained subdued as traders avoided aggressive positioning ahead of key global events.

On the macro front, domestic markets reacted to several government measures announced during the week, including a hike in gold import duty, restrictions on sugar exports, and an increase in petrol and diesel prices. These developments intensified inflation concerns at a time when the Indian rupee touched a record low against the U.S. dollar and Brent crude prices crossed the $108-per-barrel mark. Globally, while U.S. markets ended positively overnight, Asian and European indices failed to sustain momentum and traded mostly in the red, adding to cautious sentiment across emerging markets.

What's Ahead

Markets are expected to remain in a cautious and risk-off mode in the coming week as investors closely monitor global developments and macroeconomic data. Prime Minister Modi’s foreign visit till May 20, developments related to U.S.–China statements, and movements in crude oil prices are likely to remain key sentiment drivers. Currency volatility and foreign institutional investor activity will also be important indicators for near-term market direction.

Technically, Nifty is expected to face strong resistance around the 23,800–23,900 zone, while immediate support is placed near 23,590–23,540, followed by 23,450. On the global front, markets will track Japan’s Q1 GDP data on May 19, the release of FOMC meeting minutes on May 20, and manufacturing and services PMI data from India and the U.S. on May 21. These events could significantly influence short-term volatility and overall market sentiment.

Market Snapshots

Institutional Activity

Sectoral Performance

Technical Outlook

Nifty 50

The NIFTY 50 ended marginally lower at 23,643.50, snapping its two-day winning streak amid profit booking in metal, energy, and heavyweight consumption stocks. Despite weakness in Reliance, Tata Steel, Hindalco, and select financial names, the downside remained limited due to strong buying in IT and defensive counters such as Infosys, Tech Mahindra, and Dr. Reddy’s. Technically, the index remained volatile within a broad range after opening higher and failing to sustain gains near the 23,840 zone. Momentum indicators continue to signal caution, with the RSI holding just above the 40 mark, reflecting weak but stable undertones. As long as Nifty sustains above the immediate support zone of 23,356–23,178, selective recovery attempts may continue; however, a decisive move above 23,931 is required to revive bullish momentum towards the 24,109 mark. On the downside, failure to hold support levels could trigger further corrective pressure in the near term.

Bank Nifty

The NIFTY BANK index closed sharply lower at 53,710.35, declining 0.77% as sustained selling in PSU banks and select mid-sized lenders overshadowed resilience in heavyweight private banking stocks. Although the index attempted a mid-session recovery after a volatile opening, renewed selling pressure in the second half dragged it towards the day’s low. Weakness in PNB, Bank of Baroda, Canara Bank, and IndusInd Bank kept sentiment under pressure, while limited support from Kotak Mahindra Bank, ICICI Bank, and HDFC Bank failed to reverse the trend. Technically, the RSI slipping near the 40 mark indicates weakening momentum and rising caution among traders. Immediate support is placed around 52,935–52,456, which will remain crucial for maintaining broader trend stability, while resistance is seen near 54,485–54,965. A sustained move above resistance levels may improve sentiment, but unless banking participation strengthens, rallies are likely to face selling pressure at higher levels.

Nifty Financial Services

The NIFTY FINANCIAL SERVICES index ended lower at 25,343.85, pressured by sharp declines in gold financing, housing finance, and NBFC stocks amid broader weakness in the financial space. Heavy selling in Muthoot Finance, LIC Housing Finance, PFC, and Cholamandalam Financial weighed significantly on the index, while selective stability from Kotak Mahindra Bank, ICICI Bank, and HDFC Bank helped limit deeper losses. Market breadth remained weak with broader participation tilted toward declines, highlighting cautious sentiment across the sector. Technically, the index continues to trade under pressure as sustained weakness below key resistance levels indicates lack of strong bullish momentum. Immediate support is placed at 24,941–24,704, while resistance remains near 25,706–25,943. A break below support could intensify downside pressure, whereas sustained recovery above resistance may improve short-term sentiment and attract selective buying interest in financial heavyweights.

Sensex

The BSE Sensex settled lower at 75,237.99 after witnessing broad-based volatility, as weakness in energy, metal, and financial heavyweights offset gains in IT and defensive sectors. Selling pressure in Reliance Industries, Tata Steel, SBI, and UltraTech Cement weighed heavily on the benchmark, while buying in Infosys, Tech Mahindra, Power Grid, and Adani Ports helped cushion the downside. Technically, the index remained under pressure after failing to hold higher levels during the latter half of the session, reflecting cautious market sentiment amid global uncertainty and rising crude oil prices. The broader trend remains range-bound with a negative bias, while momentum indicators continue to signal consolidation. Immediate support is seen around 74,235–73,614, whereas resistance is placed at 76,241–76,862. A sustained move above resistance levels could trigger fresh upside momentum, but failure to hold support may lead to further corrective consolidation in the near term.