On Monday, May 5, India’s stock market showcased impressive gains, driven primarily by a surge in energy stocks following a significant drop in global crude oil prices. This decline in oil values not only boosted crude-sensitive sectors but also positively impacted stocks in the paint, aviation, and chemical industries. The atmosphere was further brightened by easing tensions in U.S.-China trade relations and rising optimism regarding a potential deal between India and the U.S. under the Trump administration, coupled with steady foreign investments.
Market Performance: Sensex and Nifty 50 on the Rise
The Nifty 50 index marked its second consecutive day of gains, climbing 0.52% to close at 24,472 points. Meanwhile, the Sensex experienced a rise of 294 points, or 0.43%, finishing the session at 80,850. The broader market indices also excelled, with the Nifty Midcap 100 and Nifty Smallcap 100 delivering robust performances, gaining 1.86% and 1.06%, respectively.
- Nifty 50: +0.52% to 24,472
- Sensex: +0.43% to 80,850
- Nifty Midcap 100: +1.86%
- Nifty Smallcap 100: +1.06%
Adani Group Stocks Surge Amid Controversy
In notable market activity, stocks of the Adani Group surged between 2% and 11%. This rise followed reports that Gautam Adani’s representatives engaged with Trump administration officials to address allegations in an overseas bribery investigation. In November 2022, the U.S. Attorney’s Office in New York indicted Gautam Adani and several executives for alleged bribery of Indian officials over an extended period.
Positive Trends in the Cable and Oil Sectors
Investors showed keen interest in cables and wires stocks following RR Kabel’s impressive performance in the March quarter, resulting in a 15% increase in share price. Additionally, oil marketing companies like HPCL, BPCL, and IOCL enjoyed gains of up to 7% as crude oil prices plummeted nearly 4% on Monday. This decline followed OPEC+‘s announcement of a production increase of 411,000 barrels per day starting in June, raising concerns about a potential supply surplus.
Upcoming Events: Federal Reserve Policy Meeting
Looking ahead, investors are keenly awaiting the Federal Reserve’s upcoming two-day policy meeting, set to commence on Tuesday. Currently, market indicators reflect only a 3.2% likelihood of a rate cut, as per the CME Group’s FedWatch tool. Traders will closely monitor statements from the central bank and its Chair, Jerome Powell, particularly regarding the economic outlook amid ongoing trade tensions.
Sector Performance: Auto and Energy Stocks Lead
The Nifty Auto index emerged as the standout sector, rallying 1.85%, largely propelled by Mahindra & Mahindra, whose quarterly results surpassed expectations due to increasing demand for utility vehicles. Following closely, the Nifty Oil & Gas index recorded a 1.70% increase. Other sectors such as FMCG, Metal, Consumer Durables, Pharma, and Realty also saw gains ranging from 0.70% to 1.22%.
Conversely, private banking stocks struggled, with Kotak Mahindra Bank experiencing a 4.6% decline after reporting disappointing quarterly results, dragging the Nifty Private Bank index down by 0.80%.
Technical Insights: Nifty’s Trading Range
According to Vatsal Bhuva, a Technical Analyst at LKP Securities, the Nifty index is currently trading within a confined range of 24,200 to 25,500. With solid support around 24,200–24,250 and resistance near 24,500–24,550, a breakout above 24,550 could ignite bullish momentum toward 25,000. Bhuva notes that the index’s performance above its rising 10-day EMA indicates a positive short-term trend, and as long as it remains above 24,200, the outlook stays optimistic.
In summary, Monday’s trading session reflected a positive sentiment in the Indian stock market, driven by energy sector gains and ongoing discussions in the geopolitical landscape. Investors remain vigilant as they anticipate further developments from the Federal Reserve and the unfolding dynamics within various market sectors.
