Equity benchmarks witnessed a 1.5 percent correction on May 29, extending their weakness for a third straight session. The Nifty slipped below the 23,600 mark amid broad-based selling pressure across sectors, with market breadth turning negative as about 2,081 shares declining against 925 advancing shares on the NSE. According to reports from Moneycontrol, the market may consolidate further as long as it remains below short-term moving averages, with support placed at the May low. The India Meteorological Department has forecasted a weaker monsoon in 2026 due to the El Niño factor, with the country potentially receiving its lowest rainfall in 11 years, fuelling concerns over crops, food prices and economic growth. As per Reuters, this year's monsoon is seen at 90 percent of a long-period average, below an April forecast of 92 percent, with an El Niño likely to develop soon and influence rainfall with intensity expected between moderate and strong in the latter half of the monsoon season.
The IMD's downgraded monsoon forecast to 90% of long-period average from 92% in April signals a much higher risk of severe deficit, marking India's weakest monsoon forecast since 2015. According to Anand Rathi Group's Sujan Hajra, agriculture may account for less than one-fifth of output but supports close to half the workforce, making even a relatively small hit to agricultural output disproportionately large on rural consumption and employment. The southwest monsoon accounts for roughly 75% of India's annual rainfall, with nearly half of the country's cultivated land entirely dependent on its performance. Credit rating agency Icra warns that poor rainfall in 2026 is directly tied to the developing El Niño, with below-normal monsoon likely hampering kharif sowing, hitting farm yields, pushing up food prices, and leaving water reservoirs dangerously low. As reported by Piramal Group's Debopam Chaudhuri, deficient rainfall by itself may not be severe for overall inflation, but if coupled with drought-like conditions across major agrarian belts, India's economy could find itself in a difficult position.
Samvardhana Motherson International reached an all-time high of ₹151 and is recommended as a buy with targets of ₹155 and ₹168 and stop-loss at ₹140. As reported by Axis Securities, the stock is in a strong uptrend across all time frames, forming higher tops and bottoms, with the recent breakout above a one-year down-sloping trendline at ₹135 level accompanied by huge volumes. Rain Industries is another buy recommendation with targets of ₹205 and ₹220 and stop-loss at ₹170, having decisively surpassed a down-sloping trendline resistance after strong gains during the current month.
Chambal Fertilisers and Chemicals is currently witnessing profit booking after a promising uptrend rally, with the stock requiring a clearance above the ₹470 resistance zone to trigger a fresh uptrend rally towards ₹485-₹500. According to Kotak Securities, the short-term trend remains positive but fresh moves are possible only after clearing the 200-Day Moving Average. Key support levels are identified at ₹455 and ₹450 (20-DMA), with potential downside targets of ₹450-₹470 if these levels are breached. Coromandel International has corrected over 20 percent from its previous top at ₹2,197 and continues to form lower highs, though momentum indicators show temporary oversold conditions. The analyst recommends watching the ₹1,820 level as a crucial pivot, with potential downside targets of ₹1,700-₹1,650 below this level and upside targets of ₹1,900-₹1,920 if it moves above.
Supriya Lifescience is recommended as a buy with targets of ₹1,200 and stop-loss at ₹890, having confirmed a breakout from a bullish 79-week rectangle pattern near the ₹932 zone with exceptional 600 percent surge in volumes compared to the 10-week average. As reported by Lakshmishree Investments, Thermax is another buy recommendation with targets of ₹5,400 and stop-loss at ₹4,900, having broken out of a bullish three-week tight closing pattern following strong accumulation phase. Cemindia Projects is recommended as a buy with targets of ₹1,350 and stop-loss at ₹990, having delivered a powerful breakout from a two-inside-bar formation with remarkable 986 percent surge in volume over the 10-week average.
As of 11:15 am, the Nifty 50 was trading 0.2 percent or 59 points higher at 23,606.85, hovering around 100 points below the 23,700 mark. According to ICICI Direct's Pankaj Pandey, while a weak monsoon may create pressure for select companies dependent on rural demand, the broader market impact is likely to remain limited. Mid-caps and small-caps continue to lead earnings growth with the third consecutive quarter of 20 percent plus growth, with mid-caps posting nearly 20 percent profit growth in Q4 and small-caps delivering around 24 percent. Pandey highlighted Asian Paints as a key stock to watch, citing improving volumes and stronger pricing power, noting that paint companies are better positioned to protect margins. Auto remains another preferred play with rural-focused names like Mahindra & Mahindra, while IT recovery may take time with potential revenue deflation of 2-3 percent due to AI implementation.
