Sensex rises 410 pts, Nifty tops 24,800; analysts foresee 'sell on rallies'

Stock Market Closing Bell, Wednesday, May 21, 2025: Snapping a three-session losing streak, Indian benchmark equity indices settled higher after a roller-coaster session, driven by gains in pharma, realty, auto and IT stocks.

 

The Sensex settled at 81,596.63, up 410.19 points or 0.51 per cent, while the Nifty50 closed at 24,813.45, gaining 129.55 points or 0.52 per cent. 

 

The broader markets also followed the leading indices. The BSE Midcap index settled 0.90 per cent per cent, led by gains in Go Digit (7.55 per cent), GlaxoSmithKline Pharmaceutical (6.77 per cent), Solar Industries (5.12 per cent), Gland Pharma (4.36 per cent), PB Fintech (4.16 per cent), and Endurance Technologies up by 4.16 per cent.

 

 

Vinod Nair, head of research at Geojit Investments, said that markets exhibited a broadly positive undertone today; however, overall sentiment remained confined within a narrow range, indicating the risk of a “sell on rallies” strategy in the near future amid escalating uncertainty around India-US trade negotiations.

 

BSE Smallcap rose 0.51 per cent, led by gains in Tata Teleservices (20 per cent), Trident (13.6 per cent), ECOS (India) Mobility & Hospitality (13.5 per cent), Ram Ratna Wires (11.6 per cent), Banco Products (10.9 per cent) and JK Tyres up by 10.36 per cent.

 

Barring Nifty Consumer Durables, all other sectoral indices ended in green, with Nifty Pharma and Nifty Realty emerging as the top gainers. Nifty Realty was the top sectoral gainer, rising 1.7 per cent, after stocks such as Phoenix, DLF, Macrotech Developers, Oberoi Realty, Raymond, Prestige, and Anant Raj gained over 1 per cent each.

 

From the Sensex constituents, 24 out of 30 stocks settled higher, gaining up to 2 per cent. The top gainers included Bajaj Finserv (2.02 per cent), Tata Steel (1.86 per cent), Sun Pharmaceuticals (1.57 per cent), Tech Mahindra (1.39 per cent), Bajaj Finance (1.36 per cent) and NTPC up 1.20 per cent. Among the laggards were IndusInd Bank, Kotak Mahindra Bank, Power Grid, ITC, UltraTech Cement and Maruti Suzuki. 

 

"There is a growing perception that India may not derive the anticipated benefits initially projected during the peak of the tariff war, which has since de-escalated. FIIs turned net sellers due to the concerns over the recent US credit rating downgrade, tax cut plans in the US that could significantly widen the fiscal deficit, and its effect on the upcoming Fed policy next month. This change in stance hints at an increased probability of emerging risk-averse sentiment in the near term," Nair said.   

According to Ajit Mishra, senior vice president for research at Religare Broking, the recent price action in the Nifty indicates that the bulls are making a strong effort to sustain the prevailing uptrend. 

 

Mishra advised market participants to align their positions accordingly, focusing more on stock selection based on relative strength. 

 

"Dips should be seen as an opportunity to gradually accumulate quality stocks. Among key sectors, pharma, realty, metals, and banking are preferred, while a selective approach is recommended for the rest," he added.

Market technical view

According to analysts at Bajaj Broking, Nifty formed a small bull candle with an upper shadow which remained enclosed inside previous session trading range signaling consolidation around the 24,800 levels.  In the near term, the index is expected to enter a consolidation phase within the 24,400-25,200 range to work off the overbought conditions developed in the daily stochastic oscillator after the recent sharp up move. Within the broader consolidation a move above yesterday high (24,946) will open upside towards 25100-25,200 levels in the coming sessions.  "While a breach below last 2 sessions almost identical low (24,669) will open extended decline towards 24,500-24,400 levels. Key short-term support lies at 24,350-24,400, a confluence zone marked by the prior week's low, the 20-day EMA, and the 61.8% Fibonacci retracement of the recent upswing (23,935-25,116)," Bajaj Broking said in a note.