Markets open positive amid global tensions; pharma stocks lead gains
Benchmark indices opened higher on Wednesday despite global uncertainties, with the Sensex trading at 81,760.05, up 573.61 points (0.71%), and Nifty at 24,863.55, up 179.65 points (0.73 per cent) at 10.15 AM.
Pharmaceutical stocks led the gains on the Nifty50, with Dr Reddy’s Laboratories rising 2.03 per cent, Sun Pharmaceutical Industries up 1.97 per cent, and Cipla gaining 1.62 per cent. Defence major Bharat Electronics Ltd (BEL) also showed strength, adding 1.46 per cent, while healthcare provider Apollo Hospitals advanced 1.27 per cent.
However, financial stocks faced selling pressure with Shriram Finance dropping 2.67 per cent, making it the biggest loser on the Nifty. Retail chain Trent fell 1.33 per cent, while IndusInd Bank declined 1.32 per cent ahead of its Q4 results announcement. Eternal and Adani Ports followed with losses of 1.12 per cent and 0.90 per cent respectively.
The market remains cautious following a significant sell-off in the previous session, with the Nifty closing below the psychological 25,000 mark. Foreign Institutional Investors (FIIs) sold shares worth ₹10,016 crores on Tuesday, a major reversal from their buying trend in May.
Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd, attributed the market uncertainty to multiple factors: “A combination of many factors may be responsible: credit rating downgrade of US sovereign debt and the consequent spike in US bond yields, spike in Japanese government bond yields, rising Covid cases in some parts of India and reports of a possible Israel attack on Iran are doing the rounds. Investors can wait and watch for the events to unfold.”
The market sentiment is also affected by geopolitical tensions, with crude oil prices surging amid reports that Israel might be planning strikes on Iranian nuclear facilities. July Brent oil futures were up 1.48 per cent at $66.35, while WTI crude futures gained 1.61 per cent to $63.03 as of Wednesday morning.
Rahul Kalantri, VP Commodities at Mehta Equities Ltd, noted: “Crude oil traded steady on Tuesday after US rating downgrades but off day’s low after China cuts its interest rates by 10 basis points to boost its economy. Crude oil prices also hold its support levels amid Russia-Ukraine ceasefire deal hopes.”
Gold prices remain range-bound, supported by central bank buying and strong seasonal demand in India. According to Aksha Kamboj, Vice President of India Bullion and Jewellers Association: “Gold prices have remained range-bound as market attention shifts from Moody’s US downgrade back to the Federal Reserve’s interest rate trajectory and the broader US economic outlook. Demand remains strong, with China importing its highest volume of gold in nearly a year last month, despite record-high prices.”
The India VIX, which measures market volatility, stood at 17.38, indicating elevated uncertainty. Technical analysts suggest a cautious approach in the current market conditions.
VLA Ambala, Co-Founder of Stock Market Today, commented on recent market performance: “The Nifty index has gained 53.82 per cent in three years, 11.19 per cent in the last year, and 4.5 per cent in the last month. However, there are concerns in the market that may increase downward pressure on the broader sentiment, such as the rise in COVID-19 cases in India and China’s involvement with Pakistan in defense fighter jets.”
For today’s trading session, market participants will be closely watching Q4 results from several major companies including ASTRAL, Colgate-Palmolive (COLPAL), IndiGo, IndusInd Bank, ONGC, and Power Finance Corporation (PFC).
Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd, suggested that “key support for Nifty is seen at 24,386,” while Ambala projected that “Nifty [will] gain support between 24,500 and 24,420 and face resistance near 24,750 and 24,810 in the next intraday trading session.”
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Published on May 21, 2025
