The Indian equity markets demonstrated remarkable resilience, with the Nifty 50 index extending its recovery for a second consecutive session, ending 277 points higher at 23,689 after opening 118 points higher. According to CNBC TV18, the index faced resistance near the earlier congestion zone around 23,800, leading to a slightly lower close from the day's peak despite rebounding more than 350 points from the intraday low of 23,426. The S&P BSE Sensex advanced 228.50 points or 0.31% to 74,837.48 as of 10:30 IST. The Nifty Pharma index emerged as the biggest gainer, rising 1.51% to 24,257.40 and jumping 1.75% in the two consecutive trading sessions, while IT stocks remained under pressure amid mixed sectoral performance with the IT index declining 1.99%. This recovery comes after Tuesday's sharp decline that had pushed the benchmark Nifty 50 below the crucial 23,400 level, with the Sensex crashing 1,456.04 points, or 1.92%, to close at 74,559.24 and the Nifty 50 settling 436.30 points, or 1.83%, lower at 23,379.55. The Gift Nifty was trading around 23,454 level, a premium of nearly 30 points from the Nifty futures' previous close, indicating expectations of a positive opening on Wednesday.
The Nifty Smallcap 100 index has largely held its ground in May so far, building on the over 18% rally seen last month, and is on the cusp of entering the bull market. According to Mint, small-cap stocks corrected by more than 60% to 65% in the 15 to 18 months since 2024, rendering valuations attractive compared to large-cap companies amid geopolitical uncertainties. The Nifty Smallcap 100 jumped 18.4% in April, outpacing gains of 7.5% in the Nifty 50 index. Small-cap funds drew ₹6,562 crore of inflows last month, while mid-cap funds attracted ₹6,886 crore — record highs for both categories, while large-cap funds lost 15.3% in inflows. As per Kotak Securities' Shrikant Chouhan, the sustainability of the rally will depend on earnings delivery and valuation, with the index remaining significantly below its 52-week high level of 19,224.95, putting it 7% from away from touching that peak. The Nifty Midcap 100 index rose 1.12% while the Nifty Smallcap 100 index ended nearly unchanged, indicating mixed performance across market capitalizations.
Market experts advise a sell-on-rally strategy as the overall trend remains in favour of bears, with the index closing above the crucial 23,400 zone which coincides with the 50 percent Fibonacci retracement level. According to Angel One's Rajesh Bhosale, the next key support for Nifty 50 is placed near 23,100, which coincides with the 61.8 percent retracement of the same rally. If the index manages to hold 23,400 in upcoming sessions, bulls may drive it toward 23,600–23,700 (near Wednesday's high), while a fall below this level could open the door to 23,200–23,100. For a stronger bullish structure to re-emerge, the Nifty would need to reclaim the 24,000 mark and eventually move above 24,500. Vinay Rajani of HDFC Securities said the Nifty is approaching a crucial resistance zone around 23,800, which coincides with the 20-day DEMA near 23,695, noting that a decisive breakout above 23,800 could strengthen the bullish setup and trigger a move towards the next resistance near 24,100, aligned with the 50-day DEMA. Sudeep Shah of SBI Securities said the 23,800-23,830 zone is likely to remain a key hurdle for the index, with a sustained breakout above this range potentially paving way for a move towards the 24,000 mark, while the 23,580-23,550 zone is expected to offer strong support. The daily RSI recovered slightly to 40.52 but remained below the signal line, while the MACD stayed below both the zero line and the signal line, with the histogram's red bars expanding further, suggesting continued bearish momentum.
The Bank Nifty extended its losing streak for the fourth consecutive trading session, falling 884.70 points, or 1.63%, to close at 53,555.20 on Tuesday, forming a third consecutive bearish candlestick pattern with a lower high and a lower low, signaling extension of the decline and continuation of the downtrend. The Bank Nifty ended 99 points lower at 53,456 on Wednesday, with the Indian rupee hitting a fresh record low of 95.8 against the US dollar. According to SBI Securities, the daily RSI has slipped below the 40 mark for the first time since April 02, 2026, highlighting a clear shift in momentum in favour of the bears. The immediate support for Bank Nifty is placed in the 53,100-53,000 zone, with any sustainable move below this zone potentially extending weakness toward 52,600, followed by 52,300 in the short term. The 54,100 - 54,200 zone is likely to act as a significant resistance for the index, and as long as Bank Nifty remains below the 54,200 level, the prevailing downtrend is expected to continue, with the index likely to drift towards 53,000 in the near term, followed by a potential decline towards the 52,500 level.
The pharma sector's strong performance was led by Cipla, which surged 6.88%, followed by Zydus Lifesciences rising 4.56%, Ipca Laboratories gaining 2.36%, Glenmark Pharmaceuticals up 2.34%, Laurus Labs advancing 1.63%, Ajanta Pharma up 1.57%, Lupin rising 1.51%, Sun Pharmaceutical Industries gaining 1.11%, Mankind Pharma advancing 1.09%, and Alkem Laboratories up 1.08%. According to Business Standard, Metropolis Healthcare jumped 1.73% after the company's consolidated net profit rose 74.67% to ₹50.90 crore on a 22.99% increase in revenue from operations to ₹424.68 crore in Q4 FY26 over Q4 FY25. Glaxosmithkline Pharmaceuticals rose 0.44% as the company's standalone net profit jumped 5.68% to ₹274.94 crore on a 2.38% increase in revenue from operations to ₹989.15 crore in Q4 FY26 over Q4 FY25. MTAR Technologies surged 7.23% after the company announced purchase orders worth $238.76 million, equivalent to around ₹2,278.96 crore. Among individual stocks, Adani Enterprises, Cipla and Bharti Airtel were the top gainers, while Infosys, Tech Mahindra and HCL Technologies emerged as the key laggards. Sectorally, Pharma, Healthcare and Metal stocks led the gains, while the IT index was the only sectoral loser, declining 1.99%.
The market breadth remained negative with 1,700 shares rising and 1,976 shares falling on the BSE, while 174 shares remained unchanged. According to Business Standard, the NSE's India VIX, a gauge of the market's expectation of volatility over the near term, declined 3.66% to 18.71, signalling some reduction in market nervousness. The BSE 150 MidCap Index jumped 0.13% while the BSE 250 SmallCap Index fell 0.33%, indicating mixed performance across market capitalizations. The weekly options data continues to signal that Nifty 50 is expected to trade in the broad range of 23,000-24,000 in the short term, where the maximum Put and Call open interest is concentrated. India VIX surged nearly 10% to close around 18.50 levels, with any sustained move above the 20 mark expected to further elevate nervousness among market participants. Meanwhile, the Indian rupee recovered partially after touching a record low of 95.96 against the US dollar, with the currency rebounding on expectations that the government could consider tax relief measures on foreign investment in bond allocations to support capital inflows. The rupee eventually settled at 95.77 against the dollar, down 6 paise for the day, offering some relief to overall market sentiment. Going forward, analysts expect the market to remain range-bound in the near term, with stock-specific action continuing to dominate. Investors are likely to closely monitor developments related to the West Asia conflict, crude oil price movements and foreign institutional investor flows, while concerns around inflation, currency weakness and geopolitical uncertainty are expected to keep sentiment cautious.
