Indian equities remained under pressure on Friday, May 8, as escalating geopolitical tensions following reported Iran-US clashes near the Strait of Hormuz weighed on investor sentiment. According to latest reports, the BSE Sensex ended 516 points, or 0.66%, lower at 77,844.53, while the Nifty50 slipped 151 points, or 0.62%, to close at 24,176.15. This marks back-to-back sessions of losses for both benchmarks, with the Sensex already shedding over 500 points in a single session and analysts warning that a Nifty break below 23,800 could unleash a fresh wave of selling. Despite sharp intraday swings, both indices managed to post weekly gains of over 0.70% in the previous session. In contrast, broader markets remained relatively resilient, with the BSE 150 Midcap index slipping just 0.05% and the BSE 250 Smallcap index rising 0.15%. However, the latest session saw crude oil prices exceed $100 per barrel, adding significant pressure to market sentiment.
According to Ponmudi R, CEO - Enrich Money, markets are likely to remain highly volatile in the coming week, with geopolitical developments continuing to dictate investor sentiment. As reported by Mint, market participants will closely track updates surrounding the ongoing U.S.–Iran tensions, particularly Iran's response to the latest U.S. proposals and further developments concerning the Strait of Hormuz. The geopolitical flare-up has already pushed global crude oil prices sharply higher, adding to inflationary concerns for India — a major crude importer. While prices trimmed some gains on hopes of easing hostilities, concerns over potential supply disruptions through the strategically critical Strait continue to keep investors on edge. Any fresh escalation could amplify selling pressure across rate-sensitive and energy-dependent sectors. However, optimism surrounding a possible diplomatic resolution supported global risk sentiment, as market participants continued to monitor developments closely. A constructive outcome could provide further stability to equities and other risk assets, while any negative escalation may increase volatility across global markets.
Despite broader market weakness, several individual stocks demonstrated remarkable strength through significant price-volume breakouts. Firstsource Solutions Ltd. jumped 15.83% to ₹272.40, fueled by heavy trading volume with 8.55 crore shares changing hands. The company has a market capitalization of ₹18,908.57 crore but remains below its 52-week high of ₹403.80. Mangalore Refinery and Petrochemicals Ltd. (MRPL) surged 8.12% higher at ₹167.97 on a volume of 6.61 crore shares, with a market cap of ₹29,430.42 crore and a 52-week high of ₹212.31. Shipping Corporation of India Ltd. (SCI) hit a 52-week high of ₹345 before finishing at ₹339.10, up 6.10%, with 3.34 crore shares traded. These gains occurred while the Nifty 50 index dropped 0.62% to 24,176.15 and the Sensex fell 0.66% to 77,844.53, demonstrating how company-specific news was driving investor interest more than general market concerns.
On the Sensex outlook, Hitesh Tailor, Technical Research Analyst at Choice Equity Broking Private Limited, said that from a technical standpoint, the index has shown a strong breakout with sharp upward momentum, indicating a clear shift in near-term trend in favour of bulls. According to Mint reports, key technical levels suggest support is placed in the 76,800–77,000 zone, which is likely to act as a demand area on declines, while resistance is seen around 78,000–78,300, where upside may face initial supply pressure. The near-term outlook remains positive, supported by strong momentum, though after such a sharp rally, some consolidation or volatility may emerge.
On the Nifty 50 outlook, Aakash Shah, Technical Research Analyst at Choice Broking, noted that at the end of the week, the index settled at 24,176.15, registering a gain of 178.60 points or 0.74%. As reported by Mint, the index also corrected nearly 300 points from the weekly high, resulting in the formation of a long upper wick candle, which indicates profit booking and selling pressure emerging at higher levels. Resistance levels are placed at 24,500 and 24,600, while support is seen at 24,000 and 23,800. A breakdown below 23,800 could result in increased selling pressure, with analysts noting that "a breakdown below 23,800 could result in increased selling pressure." Ganesh Dongre from Anand Rathi adds that the Nifty continued to trade near the psychologically important 24,600–24,800 zone, which also coincides with its 200-day EMA. Immediate support for the index is now placed in the 23,500–23,800 range, whereas the 24,800–25,000 band continues to act as a major resistance zone. Firstsource Solutions has a price-to-earnings ratio of 24.71, considerably lower than the IT services sector average of 38.91, suggesting it may be relatively undervalued. The company has guided for FY27 revenue growth between 10-13% and EBIT margins of 12.25-12.75%, with analysts currently recommending a 'Buy' for the stock with average price targets between ₹300 and ₹320.
Historically, crude oil prices above $100 per barrel have increased volatility in Indian stocks, affecting inflation, the rupee, and GDP growth. Sustained prices above this level are generally seen as negative for India, which imports 85% of its oil. For example, in May 2025, the Nifty showed mixed performance, with sectors like IT and Banking posting gains on some days despite overall market swings. In May 2024, markets hit record highs due to election sentiment and foreign investment, with Oil & Gas sector strength contrasting with IT sector declines. Despite recent gains in Firstsource Solutions, MRPL, and SCI, significant risks remain. Firstsource Solutions operates in a highly competitive IT services market and faces risks from a prolonged global economic slowdown. MRPL faces risks tied to crude oil prices and refining margins, while SCI's operating costs are sensitive to fuel prices. The broader market remains vulnerable to geopolitical developments, any escalation in U.S.-Iran tensions, or a more severe economic downturn than expected, which could quickly reverse recent rallies.
