Markets open higher as global sentiment improves despite heavy FII selling 

Equity markets opened on a positive note Friday morning, with the Nifty 50 gaining 173.40 points or 0.70 per cent to 24,783.10 and the Sensex rising 502.83 points or 0.62 per cent to 81,454.82, recovering from Thursday’s sharp decline as global cues turned favourable and investors adopted a “buy on dips” strategy.

The recovery came despite foreign institutional investors (FIIs) remaining net sellers for ₹5,045 crore on Thursday, while domestic institutional investors (DIIs) provided support by purchasing equities worth ₹3,715 crore. The morning session saw broad-based buying across most sectors, with information technology and consumer stocks leading the gains.

“The market is expected to open on a positive note, supported by a rally in Asian markets, declining US 10-year and 30-year bond yields, and a notable overnight rebound in US markets from lower levels,” said Vikas Jain, Head of Research at Reliance Securities. Asian markets opened with modest gains Friday as traders turned to buy long-term US government bonds, with Japan, Taiwan and South Korea indices gaining up to 0.5 per cent.

Among individual stocks, Infosys emerged as the top gainer, rising 1.84 per cent to ₹1,576, followed by Trent which gained 1.80 per cent to ₹5,438. Tech Mahindra advanced 1.69 per cent to ₹1,592, while Tata Consumer Products climbed 1.52 per cent to ₹1,143.80. The IT sector benefited from the positive global sentiment and expectations of improved business prospects.

However, Sun Pharma faced selling pressure, declining 3.01 per cent to ₹1,667 following its quarterly results announcement. The pharmaceutical major reported a drop in Q4 profit, which weighed on investor sentiment. Hindalco was the only other loser in the Nifty 50, falling marginally by 0.33 per cent to ₹647.40.

“In yesterday’s session, Nifty came under pressure but showed resilience with bargain hunting at lower levels, ultimately closing off its intraday lows,” noted Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd. “This Friday morning, Gift Nifty is trading steady, hinting at likely consolidation with a positive bias.”

The previous session saw intense volatility, with the Nifty declining 204 points to close at 24,609.70 after touching intraday lows near 24,500. Technical analysts noted that the index found support at its 20-day exponential moving average and bounced back strongly in the final hours of trading.

“The Nifty ended 204 points lower yesterday, closing at the all-important 24,610 level. Technically speaking, yesterday’s recovery has traced a candle with a long lower shadow and took support at the lows from last Thursday’s candle,” said Akshay Chinchalkar, Head of Research at Axis Securities.

Sectoral performance showed mixed trends, with capital markets and FMCG indices having corrected nearly 1.5 per cent in the previous session, while the defense index outperformed with a 2.10 per cent rally. The defense sector continued to attract investor interest following strong quarterly results and order book announcements from key companies.

“Focus on Defense Sector – Expect positive for defense stocks after announcing impressive quarterly results and GRSE announcing strong order book worth of ₹2,500 cr,” Jain added, highlighting sector-specific opportunities emerging from the current market correction.

Market participants remain cautiously optimistic about the near-term outlook, with several analysts recommending a “buy on dips” strategy. The Gift Nifty trading 50 points higher in early morning trades suggested positive momentum for the domestic markets.

“Despite the Nifty falling 1 per cent yesterday, the Nifty 500’s advance-decline ratio stood at 1:1.4, indicating a shift in market activity towards mid- and small-cap stocks,” Jain observed, suggesting broader market participation despite benchmark index weakness.

Technical analysts identified key support levels for the Nifty at 24,600 followed by 24,500 and 24,400, while resistance is placed at 24,700, 24,800 and 24,900. The Bank Nifty is expected to find support at 54,700 with resistance at 55,000 levels.

“As long as Nifty holds above its key support at 24,386, the intraday bias remains neutral to positive with immediate upside targets at 25,000,” Tapse said, providing guidance for short-term traders.

The commodity markets presented a mixed picture, with gold facing pressure from rising bond yields and a stronger dollar. “Gold has support at $3,278-3,260 while resistance at $3,325-3,345,” said Rahul Kalantri, VP Commodities at Mehta Equities Ltd. Crude oil prices continued to face headwinds from potential OPEC+ supply increases and dollar strength.

Looking ahead, market focus will remain on quarterly earnings announcements from JSW Steel, Ashok Leyland, Glenmark Pharma, and other major companies scheduled for Friday. The earnings season continues to provide stock-specific opportunities amid broader market volatility.

“Given the current market dynamics and global uncertainties, traders are advised to adopt a disciplined approach with strict risk management,” advised Hardik Matalia, Derivative Analyst at Choice Broking, emphasizing the importance of risk management in the current environment.

Published on May 23, 2025