The short-term texture of the market is still positive
Shrikant Chouhan,
Head Equity Research,
Kotak Securities
Mumbai, May 19, 2025: The benchmark indices witnessed profit booking at higher levels. The Nifty ends 74 points lower, while the Sensex was down by 271 points. Among sectors, the Reality index outperformed, rallying over 2 percent, whereas the Digital index lost the most, shed nearly 1.5 percent. Technically, after a muted open once again, the market witnessed selling pressure at higher levels. On daily charts, it has formed a small bearish candle, which indicates temporary weakness. However, the short-term texture of the market is still positive.
For day traders, now 25,000/82200 would act as a trend decider level. Below this, we could see an intraday correction down to 24,850-24,800/81700-81500. On the other hand, a breach of 25,000/82200 could change the sentiment. Above this, the market could rally up to 25,100-25,150/82500-82700.
Gaurav Garg, Lemonn Markets Desk, adds:
Nifty Ended Below 25,000 as Markets Declined for Second Straight Session. Indian equity markets extended their losses for a second consecutive day on Monday, dragged down by a combination of weak global cues, sharp selling in IT stocks, and rising volatility. The benchmark Sensex shed 459.53 points to settle at 81,964.57, while the Nifty50 slipped below the psychologically crucial 25,000 mark.
Investor sentiment took a hit after Moody’s downgraded the US sovereign credit rating to 'Aa1', citing the nation’s surging $36 trillion debt. This marks the third downgrade in recent history, following similar moves by S&P in 2011 and Fitch in 2023. The downgrade rattled global financial markets, pushing the US 10-year Treasury yield up to 4.52% and the 30-year yield past 5%, signaling growing risk aversion.
Global markets echoed this nervousness. Asian and European equities traded mostly lower, weighed down by mixed economic signals from both the US and China. US stock futures also pointed to a weak open.
Indian IT stocks fell over 1%, reacting to concerns over the health of the US economy. Given IT’s significant 11.11% weight in the Nifty50, this sector’s decline exerted meaningful downward pressure on the index.
Adding to the pressure, the India VIX jumped 11% to 19.81, highlighting heightened investor anxiety and expectations of continued market swings. Despite robust institutional buying worth Rs14,018 crore, market weakness lingered. This contrast suggests that foreign institutional investors may be increasing short positions in derivatives, indicating a potentially volatile period ahead.
