Indian equity markets concluded a tumultuous week with slight upticks, navigating a landscape of global challenges and rupee depreciation. On Friday, the BSE Sensex rose 0.23% to settle at 75,415.35, while the NSE Nifty climbed 0.32% to close at 23,719.30. Nifty futures on the NSE International Exchange indicated a potentially positive opening for Monday, May 25, trading up 29 points at 23,720.
Key Factors Influencing Market Sentiment
According to Ajit Mishra, SVP of Research at Religare Broking Ltd, benchmark indices experienced intraday volatility due to ongoing rupee weakness, mixed global signals, sectoral shifts, and persistent uncertainties regarding inflation and interest rates. Ponmudi R, CEO of Enrich Money, highlighted that a decline in crude oil prices and reports of indirect US–Iran discussions contributed to a resurgence in risk appetite. Vinod Nair, Head of Research at Geojit Investments Ltd, reinforced this, noting that the market continues to reward strategic buying during downturns.
Nair also observed that the rupee gained crucial support from efforts to ease Middle East tensions, which led to a modest pullback in crude prices. However, Ponmudi cautioned that sustained foreign selling continued to limit stronger upward momentum in the broader market, maintaining investor caution despite intermittent recovery attempts. A significant development was the Reserve Bank of India's substantial dividend transfer of Rs 2.87 lakh crore to the central government for FY26, which Mishra believes will enhance fiscal flexibility and support government spending amid global uncertainties.
Nifty: Key Levels for May 25
For the 50-share Nifty index, Ajit Mishra pinpointed immediate support around the 23,150–23,250 range, with a deeper foundational support at 22,900. Ponmudi R placed near-term support higher, at 23,600, with broader support identified between 23,400 and 23,300. Both analysts concurred that the 23,800–24,000 zone presents a significant resistance hurdle for the index.
Sensex: Key Levels for May 25
Shifting focus to the 30-share Sensex, Ponmudi R identified immediate resistance in the 75,800–76,000 band. Conversely, key support levels for the Sensex are positioned near the 74,600–74,400 marks.
Recommended Trading Strategy
Given the complex interplay of elevated crude prices, currency fluctuations, and geopolitical risks, analysts recommend a cautious, stock-specific approach. Mishra advised traders to avoid aggressive leverage and maintain rigorous risk management practices. He suggested utilizing market dips to selectively acquire quality stocks in sectors such as energy, pharmaceuticals, and metals. Mishra also expressed optimism regarding themes linked to defense and capital markets but cautioned against the IT sector following its recent bounce.
Nair noted that the IT sector performed strongly last week, benefiting from attractive valuations after a recent correction. Despite these sectoral divergences, Nair agreed that a range-bound, stock-specific environment is likely to persist until macroeconomic and geopolitical factors align more favorably.