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The Indian stock market commenced the trading week on a cautious note, with benchmark indices opening flat amid mixed global cues. Early trading sessions witnessed selling pressure in the IT sector, impacting overall market sentiment.
At around 9:32 am, the BSE Sensex was marginally up by 3.88 points or 0.00 percent, standing at 82,326.71. Meanwhile, the NSE Nifty advanced by 14.70 points or 0.06 percent, reaching 25,034.50. While the broader indices remained relatively stable, sectoral indices showed varied performances.
Among the key indices, the Nifty Bank index climbed 134.25 points or 0.24 percent to 55,489.15. The Nifty Midcap 100 index also gained 143.30 points or 0.25 percent to trade at 57,203.80, while the Nifty Smallcap 100 index rose by 141.35 points or 0.80 percent to 17,701.75.
Market Analysis and Expert Insights: According to analysts, the primary focus remains on the October 2024 peak at 25,235, which is seen as the next significant resistance level. Beyond that, the September high of 26,277 poses a formidable challenge. Anand James, Chief Market Strategist of Geojit Investments Limited, highlighted the potential volatility as the market approaches these key levels.
“With the ongoing rally, we anticipate a continuation of the uptrend, provided the index maintains above 24,950. However, failure to breach 25,235 or a break below 24,870/807 levels could trigger a downside correction,” said James.
Sectoral Performance: Among the Sensex constituents, several stocks experienced significant losses during early trade. Major laggards included Infosys, TCS, IndusInd Bank, HCL Tech, Tech Mahindra, M&M, Eternal, Reliance, and L&T. Meanwhile, stocks like NTPC, Bajaj Finance, Tata Motors, Sun Pharma, Bajaj Finserv, PowerGrid, SBI, and HDFC Bank emerged as top gainers, providing some support to the indices.
FII Inflows Driving Market Sentiment: A key driver behind the ongoing rally has been the sustained inflow of foreign institutional investments. So far in May, FIIs have pumped in approximately Rs 23,800 crore into the Indian equity markets, reflecting renewed investor confidence. Analysts attribute this bullish sentiment to easing global trade tensions, positive developments in the US market, and the recent ceasefire agreement between India and Pakistan.
Global Market Overview: Global markets presented a mixed picture, with most Asian indices trading in the red. Markets in China, Hong Kong, Japan, Bangkok, and Seoul experienced declines, while Jakarta emerged as the only Asian market in positive territory.
In the US, major indices concluded the last trading session of the previous week on a positive note. The Dow Jones Industrial Average surged by 331.99 points or 0.78 percent to close at 42,654.74. The S&P 500 gained 41.45 points or 0.70 percent to settle at 5,958.38, and the Nasdaq Composite advanced by 98.78 points or 0.52 percent to close at 19,211.10.
Institutional Activity: On the institutional front, foreign institutional investors (FIIs) were net buyers of equities worth Rs 8,831.05 crore on May 16. On the other hand, domestic institutional investors (DIIs) also remained net buyers, with a total purchase of Rs 5,187.09 crore in equities on the same day.
Outlook for the Week: Market participants remain cautiously optimistic, with a focus on crucial resistance levels and global market cues. Analysts recommend maintaining a stock-specific approach, particularly in sectors showing relative strength, such as financials and consumer durables. As the market inches closer to key resistanc
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