The global jitters sparked by Moody’s downgrade of the US credit rating; The Nifty ends 261 points lower while the Sensex was down by 870 points
Shrikant Chouhan,
Head Equity Research,
Kotak Securities
Mumbai, May 20, 2025: Today, the benchmark indices corrected sharply, the Nifty ends 261 points lower while the Sensex was down by 870 points. Among Sectors, all the major sectoral indices registered intraday profit booking at higher levels but Defense, Auto indices lost the most shed over 2 percent. Technically, after a positive open market consistently witnessing selling pressure at higher levels. On daily charts it has formed long bearish candle and on intraday charts it is holding correction continuation formation which is largely negative.
We are of the view that, as long as market is trading below 24850/81700 the correction wave is likely to continue. On the down side market could retest the level of 24550-24500/80800-80500. On the higher side above 24850/81700 the sentiment could change. Above the same, chances of hitting 25000/82200 and 25100/82500 would turn bright.
Satish Chandra Aluri, Lemonn Markets Desk, states: "Benchmark indices ended sharply lower on Tuesday, as the Sensex and Nifty50 fell notably amid global jitters sparked by Moody’s downgrade of the US credit rating. The sell-off was further intensified by foreign institutional investors (FIIs) turning net sellers and widespread profit booking following a recent rally. Heavyweights like HDFC Bank and Reliance Industries saw significant selling pressure, dragging the benchmarks lower. All major sectors also closed in red with losses.
The markets have now moved in a narrow range for three consecutive sessions, suggesting that investors are pausing after the highs touched earlier this month. The lack of fresh domestic triggers and lingering global uncertainty—especially concerning US fiscal stability—has kept sentiment subdued.
A potential India-US trade deal, hinted at by President Trump last week, is being eyed as a possible catalyst. However, in the absence of any concrete announcement, market participants await more clarity.
The broader market also reflected weakness, with most small- and mid-cap stocks ending in the red, underscoring the extent of profit booking and overall volatility. Both foreign and domestic institutional investors were net sellers in Monday’s session.
On technical front, Nifty 50 slipped below 24700 level and had a weak close to the day ending near lows. On the upside, expect 24800 to act as immediate resistance, while 24500 acts as immediate support on the downside."
