Stock Market Declines as Sensex Drops 114 Points, Nifty 50 Closes Above 24,300

Indian Stock Market Benchmarks End in the Red on Thursday

The Indian stock market benchmarks, the Sensex and the Nifty 50, ended in the red on Thursday, May 7, largely due to profit booking in select heavyweights, including HUL, TCS, ITC, and Reliance. The Sensex fell 114 points, or 0.15%, to end at 77,844.52, while the Nifty 50 settled at 24,326.65, down 4 points, or 0.02%.

Market Performance Comparison

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However, the mid and small-cap segments posted strong gains, defying the trend in benchmarks. The Nifty Midcap 150 and the Nifty Smallcap 250 indices rose more than 1% each. Thanks to gains in the broader markets, the overall market capitalisation of BSE-listed firms rose to over ₹475 lakh crore from ₹472.8 lakh crore in the previous session, making investors richer by over ₹2 lakh crore in a day.

The domestic market witnessed selective buying as hopes of a potential US-Iran deal grew stronger, driving Brent Crude prices below the $100 per barrel mark. The Indian rupee jumped after a slump in crude oil prices. According to PTI, the domestic currency rose by 25 paise to close at 94.24 against the US dollar.

Domestic equities swung between gains and losses amid mixed global cues, even as the rupee strengthened. Selective risk appetite was evident in pockets of the market, with mid and small caps outperforming large caps. Vinod Nair, Head of Research at Geojit Investments, noted that reports of a potential US-Iran agreement pushed crude below $100 per barrel, easing near-term inflation concerns. However, optimism faded quickly amid uncertainty around nuclear enrichment discussions, triggering profit booking.

Going ahead, Q4 earnings and management guidance will remain key drivers of sentiment, though markets are likely to stay volatile until clearer signals emerge from West Asia. Nair added that the Nifty 50 index saw 24 stocks end with gains, with HDFC Life, Bajaj Auto, and Mahindra and Mahindra at the top. On the flip side, HUL, TCS, and Titan ended as the top laggards in the index.

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In terms of index contribution, HUL, TCS, ITC, Titan, and Bajaj Finance were among the top drags on the index. Among the sectoral indices, Nifty Consumer Durables, IT, and FMCG fell by almost 1%, while Nifty Auto jumped 2%. Nifty Bank ended with a modest gain of 0.12%.

While the benchmarks ended lower, over 200 stocks, including Bajaj Auto, Cummins India, Lupin, Nestle India, and Tata Steel, hit their 52-week highs in intraday trade on the BSE.

Technical View

Rupak De, Senior Technical Analyst at LKP Securities, highlighted that the Nifty 50 has given a consolidation breakout on the daily timeframe, suggesting a rise in optimism. The RSI is in a bullish crossover on the daily timeframe, and the index has moved above the 50 EMA, confirming an improving trend. In the short term, the trend is likely to remain strong, with the possibility of a rise towards 24,750–24,800. On the lower end, support is placed at 24,200, below which the trend may weaken.

Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities, expects the zone of 24,200–24,180 to act as an immediate support. On the upside, the zone of 24,480-24,500 will act as immediate resistance for the index. Any sustainable move above 24,500 will lead to a sharp upside rally up to the 24,650 level in the short term.