The Indian stock market experienced a day of mixed fortunes on Friday, May 2, ultimately closing in positive territory despite a significant pullback from earlier highs. Investors capitalized on gains, leading to a downturn in key indices during the latter part of the trading session. The day began quietly but quickly gained traction, particularly due to strong performances in the financial sector.
Market Overview: Nifty and Sensex Performance
After a promising start, both the Nifty 50 and Sensex could not maintain their upward trajectory. The Nifty 50 dropped 243 points from its peak, settling at 24,346, reflecting a modest rise of 0.05% from the previous close. Similarly, the Sensex saw a reduction of 662 points from its intraday high, finishing the day up by 0.34% at 80,517.
- Nifty 50 weekly gain: 1.28%
- Sensex weekly gain: 1.64%
Interestingly, this fluctuation did not detract from the indices’ overall performance, as both managed to secure their third consecutive week of gains. A notable factor influencing this trend has been a renewed interest from foreign investors in Indian stocks, signaling improved sentiment amid ongoing market fluctuations.
Foreign Investment Insights
After a period of net selling, foreign investors have re-entered the Indian market. Over the last 11 trading sessions (from April 15 to April 30), they invested a substantial ₹37,400 crore into Indian equities. This resurgence is attributed to optimism surrounding India’s robust domestic economy, which is perceived as more resilient in the face of global trade tensions compared to its peers.
Trade Developments Boosting Market Confidence
In addition to domestic factors, the ongoing negotiations for a bilateral trade agreement between India and the United States have also contributed to market gains. On April 29, President Trump expressed positive sentiments regarding the discussions, hinting at a potential tariff deal that could further bolster Indian stocks.
Moreover, easing tensions between Washington and Beijing, with China showing willingness to engage in trade talks, adds to the positive market outlook.
Sector Performance: Winners and Losers
From a sectoral perspective, the Nifty Oil and Gas index emerged as the top performer, climbing by 0.73%. Other sectors, including Nifty Media and Nifty IT, also posted gains of 0.49% and 0.27%, respectively. Conversely, the Nifty Consumer Durables index was the weakest performer, declining by 1.39%, while other sectors like Nifty Metal, Nifty Pharma, Nifty Realty, Nifty FMCG, and Nifty Auto registered losses between 0.10% and 0.74%.
Technical Outlook: What Lies Ahead
According to Rupak De, a Senior Technical Analyst at LKP Securities, the index has been volatile recently, particularly after hitting resistance at the 24,550 mark. He noted that the daily chart indicates selling pressure at higher levels.
- Support level: 24,250 – a decline below this could lead to further corrections toward 24,000.
- Range-bound expectations: The index might fluctuate between 24,000 and 24,550 unless there’s a decisive breakout above 24,550, which could trigger a significant upward rally.
In conclusion, while the Indian stock market displayed some volatility on May 2, the overall sentiment remains optimistic, driven by renewed foreign investment and encouraging trade developments. As investors keep a close watch on market trends and economic indicators, the potential for further growth remains on the horizon.
