Indian domestic equity markets finished the week with marginal gains for the second consecutive week, despite a sharp downturn on Friday. The BSE Sensex closed at 77,328.19, and the NSE Nifty settled at 24,176.15. Both benchmarks recorded approximately a 0.6% decline in the final session, ending in the red.
Anticipating Monday's Market Open
Early indicators suggest a mildly optimistic start for the stock market on Monday, May 11. Nifty futures on the NSE International Exchange were trading higher, signaling a positive bias for the opening session.
Factors Influencing Market Sentiment
The late-week weakness was primarily driven by a fresh surge in crude oil prices, which briefly pushed Brent crude past the $100 mark. This spike followed renewed military exchanges between the US and Iran, dampening hopes for a swift peace agreement and keeping global risk appetite subdued. Ponmudi R, CEO of Enrich Money, noted that elevated oil prices remain a significant concern for the domestic economy, raising fears of imported inflation, pressure on the rupee, and potential impacts on corporate margins.
Conversely, the market demonstrated underlying resilience, largely absorbing the late-week profit-booking. Vinod Nair, Head of Research at Geojit Investments Ltd, attributed this to favorable state election outcomes and fourth-quarter corporate earnings that exceeded cautious expectations. Midcap and smallcap indices outperformed, with sectors such as autos, defense, realty, and pharma experiencing strong buying interest.
Key Levels to Monitor for Nifty and Sensex
Nifty (50-pack index)
- Consolidation Zone: 24,000–24,400
- Resistance: The 24,300–24,500 band is identified as a strong supply zone. A sustained breakout above this range could propel the index towards 24,600–24,800 levels.
- Support: The 24,100–24,000 region remains a crucial support area. A break below this zone might open the path towards 23,800 levels.
Sensex (30-share index)
- Resistance: Immediate resistance is placed at 77,600–78,000.
- Support: Key support levels are identified at 76,700–76,300.
Analysts suggest that a clear breakout on either side of these ranges will be necessary to determine the next significant directional move for both indices.
Recommended Investment Strategy
Experts advise investors to maintain a stock-specific approach, emphasizing pharmaceutical, energy, automotive, and select metal counters. Ajit Mishra, SVP of Research at Religare Broking Ltd, recommends being selective across other sectors. Vinod Nair of Geojit Investments further suggests staying nimble and focusing on fundamental strength and earnings quality until greater geopolitical clarity emerges. He also highlighted selective opportunities within the mid and small-cap segments, where valuations appear reasonable, supported by domestic growth drivers like infrastructure spending and a recovery in consumption.