The Indian stock indices relinquished their historic ascents during the later hours of trading, experiencing a precipitous decline on May 27. Amid a volatile session, the indices reached unprecedented peaks, buoyed by the final phase of general elections. The Nifty 50 surged to an all-time zenith of 23,110.80 but failed to maintain its gains, ultimately closing 25 points or 0.11% lower at 22,932.45. Concurrently, the BSE Sensex escalated to a new pinnacle of 76,009.68, breaching the psychological barrier of 76,000 for the inaugural time. Nonetheless, it too succumbed to a similar fate, surrendering its record gains and concluding 20 points or 0.03% lower at 75,390.50. Stocks in oil & gas, power, and metal sectors were the primary detractors, whereas banking stocks propelled the indices to new heights.
Prominent losers within the Nifty 50 on May 27 included Adani Enterprises, Wipro, Grasim Industries, ONGC, and SBI Life Insurance.
Sectoral indices experienced upward momentum
The Nifty Midcap 100 achieved its historic summit of 53,043.60, surpassing the psychological threshold of 53,000. Subsequently, the sectoral index, encompassing midcap enterprises, concluded 337.30 points or 0.64% higher at 52,761.75. Nifty Bank concluded 310.15 points or 0.63% higher at 49,281.80. Within the broader market, smallcap and midcap stocks ended the day in positive territory.
“The bulls are encountering substantial resistance at the 23,000 levels as investors commence profit-taking at elevated levels to preclude any abrupt market reactions ahead of the election results. Enhanced earnings growth, anticipations of a resurgence in private capital expenditure, and a reduction in FII selling intensity are the key positive catalysts in the market. The imminent release of India’s Q4 GDP and US inflation figures this week will also steer investor sentiment in the short term,” elucidated Vinod Nair, Head of Research at Geojit Financial Services.
“The presence of resistance around the 23,100 level in the Nifty, coupled with an increase in the volatility index, India VIX, curtailed the upside. We might witness further consolidation in the index moving forward, hence participants should concentrate on meticulous stock selection and adept trade management,” stated Ajit Mishra, Senior Vice President of Research at Religare Broking.
Nifty’s Technical Perspective
“Bank Nifty is in the process of synchronizing with the other indices, hence we are observing a continuation of positive price action. Support from key heavyweights of the index like HDFC Bank, ICICI Bank, Axis Bank, and IndusInd Bank is underpinning the upward movement. We anticipate that the Bank Nifty is likely to persist in its ascent towards 49,700 – 49,975 from a short-term viewpoint. The trailing stop-loss for long positions should be maintained at 49,000,” remarked Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas.
