Top News

Dalal Street seems to be taking a breath.

Indian benchmark indices were on Thursday (May 7) unable to maintain direction post Wednesday’s rally, as investors became wary at higher levels and booked profits in the big weights. Even while global cues were firm and crude oil softened, the market could not hold on to its opening gains, suggesting that traders are not yet fully convinced about the directional move to come.

The BSE Sensex is at 77844.52 points, which declined 114 points, and the Nifty is at 24326.65 points, which gained 0.05%, or 12.55 points, in the last trading session. But the action was anything but quiet. Markets witnessed a wide swing during the session, with the Sensex swinging over 670 points between the day’s high and low as expiry-day volatility kept traders busy.

Why Is The Market Directionless At The Moment?

There are a few reasons why the markets are in a “wait-and-watch” mode.

First, foreign investors continue to withdraw money from Indian equities. In the recent sessions, FIIs sold Rs 5,834.90 crore, keeping the sentiment under pressure despite decent domestic participation.

Secondly, the world continues to be somewhat uncertain, and investors are still watching the developments in West Asia, crude oil prices and global risk sentiment. Crude oil prices have declined slightly to around $98 for a barrel of Brent oil, but traders are not comfortable taking any decisive stance on the market.

However, the market had already seen a strong rally over the last couple of trading sessions, and a little bit of profit booking was expected at higher levels.

Market Takes a Dive on Heavyweights

IT, FMCG and select pharma names were the major pressure points on the benchmark indices.

Hindustan Unilever, Tata Consultancy Services, Tech Mahindra, Titan and Sun Pharma were among the biggest laggards on the Sensex.

But it was not all feebleness.

Auto and capital goods stocks stayed in buying mode. Gains in stocks such as Mahindra & Mahindra, NTPC, Kotak Mahindra Bank and Tata Steel limited losses.

Interestingly, the wider market was looking much healthier than the benchmarks. Retail participation remains strong underneath the surface as mid-cap and small-cap stocks continue to outperform.

Nifty at 24,400: Why this level is important

Now, for traders, 24,400 on the Nifty has become the big figure to watch.

The index traded briefly above that level during Thursday’s session but was unable to stay above it. A decisive break above 24,400 would ignite fresh upside momentum, according to market experts. In the meantime, the market may continue to trade sideways in a wide range.

Technical analysts said Nifty is currently consolidating between 23,800 and 24,400, and the next big move may depend on whether the bulls are able to take control above resistance levels.

Bank Nifty Shows Strength Still

Bank Nifty is still showing some resilience compared to the benchmark indices.

The banking index is structurally positive as long as it stays above the 55,000 mark, analysts said. The index continued to be supported by private banking names, although PSU bank stocks were under some pressure in the session.

Unless key support zones are decisively broken, technical analysts still see the broader trend favouring the bulls.

What Sectors Are on the Move?

Thursday’s session made it clear that investors are selective and not buying the market broadly.

Here was where the action was:

Winning sectors
Capital Goods rising over 2%
Auto stocks gained close to 2%.
Industrial and power stocks were strong.
Steady buying also entered Realty shares
Sectors Under Strain
IT stocks remained under pressure; FMCG stocks saw profit booking
PSU Banks and Consumer Durables also fell

This suggests the continued preference for domestic growth and infrastructure- themes over defensive sectors in investment decisions.

Rupee Recovery and Lower Oil Prices: A Respite

There was a silver lining too.

The Indian rupee recovered from its intraday losses to settle 23 paise higher at 94.26 against the US dollar. The stable rupee usually has a comforting effect on the market sentiment, particularly during FII outflows.

The lower crude oil prices offered investors some breathing room too. Lower crude prices helped assuage inflation concerns and ease pressure on the economy. The country is import-dependent on its oil needs.

So, What is Today’s Outlook?

The overall mood on Dalal Street still looks cautiously optimistic, but with an obvious layer of nervousness beneath.

Markets are unlikely to breakout from a range in the near term unless a strong trigger emerges, analysts said. Traders will be watching for:

Activity of foreign investors
Crude oil transportation
Worldwide Market Trends
Dollar-rupee action
Geopolitics crisis

For the moment, the market appears to be consolidating after its recent rally rather than heading into a deeper correction. That said, there could be some choppiness and stock-specific action on Friday, May 8, unless the Nifty decisively breaks above the crucial 24,400 mark.

The big question now is – will Dalal Street get back to steam again, or will the last trading session of the week remain stuck in a volatile, range-bound zone?

(Disclaimer: This article is for informational purposes only and should not be considered investment advice. The views, opinions, and recommendations expressed herein are those of the respective experts. Readers are advised to consult a qualified financial advisor before making any investment decisions.)

The post Stock Market Outlook Today, May 8: Will Sensex, Nifty Stay Range-Bound Amid FII Selling, Profit Booking? appeared first on NewsX.