The Indian stock market benchmarks, Nifty 50 and Sensex, experienced a volatile session on Monday, May 27. Despite reaching new intraday record highs, both indices closed flat due to profit booking at higher levels against a backdrop of mixed global signals.
Record Highs and Closing Performance
The Sensex opened higher and hit an all-time high of 76,009.68, while the Nifty 50 touched 23,110.80. However, profit booking at peak levels led to mild losses by the session’s end. The Sensex finished 20 points lower at 75,390.50, down 0.03%, and the Nifty 50 closed 25 points down at 22,932.45, marking a 0.11% decrease.
Market Movers and Shakers
Heavyweights like Reliance Industries, ITC, and Mahindra were among the top drags on the Nifty 50. Conversely, HDFC Bank, Axis Bank, and Larsen & Toubro provided robust support. In total, 29 stocks in the Nifty 50 index ended in positive territory.
Spike in Volatility
The market saw a significant increase in volatility, with the India VIX rising nearly 7% to 23.19. The volatility index has surged over 80% in May, reflecting heightened market uncertainty.
Outperformance of Mid and Small Caps
Mid and small-cap stocks outperformed the benchmarks. The Nifty Midcap 100 index climbed 0.64%, while the Nifty Smallcap 100 index rose 0.81%.
Caution Ahead of Key Events
Investors are adopting a cautious stance, booking profits at higher levels to mitigate risks ahead of the upcoming Lok Sabha election results and the release of Q4FY24 GDP data expected on Friday.
Vinod Nair, Head of Research at Geojit Financial Services, commented, “The bulls are facing stiff resistance at 23,000 levels as investors start booking profit at higher levels to avoid any knee-jerk reaction in the market ahead of the election result.”
Top Gainers and Losers
In the Nifty 50 index, Divi’s Labs (up 2.99%), IndusInd Bank (up 1.39%), and Adani Ports (up 1.17%) emerged as top gainers. Meanwhile, Adani Enterprises (down 2.66%), Wipro (down 2.17%), and Grasim (down 2.09%) were the top losers.
Sectoral Performance
Sectoral indices showed a mixed performance. Nifty Media, Metal, and Oil & Gas posted significant losses, declining by 0.97%, 0.62%, and 0.55% respectively. On the flip side, Nifty Bank (up 0.63%), PSU Bank (up 1.33%), Private Bank (up 0.54%), and Realty (up 0.85%) recorded healthy gains.
Market Outlook
Experts maintain a positive near-term outlook for the market. Rupak De, Senior Technical Analyst at LKP Securities, noted that as long as the index stays above key moving averages, the outlook remains favorable.
“Support lies at 22,900, below which the index might slip towards 22,800. On the higher end, bears are active around 23,000-23,050. A decisive move above 23,050 might trigger a stronger rally towards higher levels,” De explained.
Shrikant Chouhan, Head of Equity Research at Kotak Securities, pointed out that the formation of a bearish candle on daily charts signals temporary weakness. “We believe the larger market texture is still positive, but buying on intraday corrections and selling on rallies would be the ideal strategy for day traders.”
Chouhan added, “Technically, 22,800 -22,735/75,000-74,750 would act as key support levels while 23,100-23,175/75,700-76,000 could be the key resistance areas for day traders. However, below 22,735/74,750, the uptrend would be vulnerable.”
