The NIFTY 50 index reclaimed the 24,400 mark in intraday trade on Thursday, May 7, marking its fourth consecutive session of gains and looking set for extending gains for the second consecutive week. According to reports from Mint, the index has jumped 10% from its April 2 low of 22,182.55, demonstrating strong momentum despite challenging market conditions including rising crude oil prices and foreign institutional investor selling pressure. The current setup appears mildly positive, supported by positive global cues and a decline in crude oil prices, even as the prospects of a potential peace deal between the US and Iran continue to boost market sentiment. On May 6, the Nifty 50 soared 298 points (1.24 percent) to 24,331, while Bank Nifty rallied 1,434 points (2.63 percent) to 55,981, supported by healthy market breadth with 2,230 shares advancing against 737 declining shares on the National Stock Exchange.
The NIFTY 50 is currently consolidating above the 24,000 mark with immediate resistance placed near 24,300–24,400, while support is seen around 24,000–23,900. As reported by market experts, sustaining above 24,350 can open the door for 24,500–24,600, followed by 24,800, though 24,000 is likely to remain the immediate crucial support level. The index has successfully reclaimed and closed above its 50-day EMA, which is a positive technical development, while the RSI has re-entered a bullish crossover and formation of higher lows continues to keep the Nifty's uptrend intact. Bank Nifty closed above its recent swing high and reclaimed the 50 DEMA at 56,060, with momentum indicators showing bullish crossover and potential targets at 56,600–56,800, followed by 57,200.
The prospects of a potential peace deal between the US and Iran have significantly boosted stock market sentiment, with the US reportedly sending a one-page memorandum of understanding to Iran through Pakistani mediators to settle the conflict. According to Mint, Iran is reportedly reviewing the proposal, and while a peace deal would certainly be positive for the Indian market, crude oil prices remain the key variable to watch. Vinod Nair, Head of Research at Geojit Investments, noted that "crude should cool towards the $80 per barrel mark or even lower for markets to sustain a strong rally," emphasizing that positive developments may trigger a sharp short-term bounce but investors will focus on fundamentals after initial excitement.
The NIFTY Midcap 100 index is currently just a stone's throw away from its all-time high, highlighting sustained buying interest in midcap stocks despite the benchmark index being largely range-bound in recent sessions. The Nifty Smallcap 100 index is trading near its six-month high, indicating continued outperformance in the smallcap space. BHEL emerged as the top gainer in the NIFTY Midcap 100 index, surging 57% since March 30, with Cochin Shipyards, Oracle Financial Services Software, BSE, Billionbrains Garage Ventures, HUDCO, Motilal Oswal Financial Services, Hitachi Energy, and Suzlon Energy delivering strong returns between 37% and 47%. Notably, 95 out of 100 stocks in the index have given positive returns during this period, with the midcap rally continuing even as investor sentiment was shaken by rising crude oil prices, foreign institutional investor selling, and the rupee hitting new lows against the US dollar.
