Markets ended a see-saw Thursday session nearly flat, as a firm opening driven by easing geopolitical fears and softer crude prices gave way to broad-based profit booking that wiped out over 200 points from intraday highs. The reversal underscored a market still caught between pockets of optimism and stubborn macro headwinds.

“...valuations in large caps are now below long-term averages after the recent correction,” said Sorbh Gupta, Head of Equity at Bajaj Finserv AMC, reflecting the cautious but selective opportunity the market presents.

The Nifty 50 settled at 23,654.70, down just 4.30 points or 0.02 per cent, after touching an intraday high of 23,859.90 within the first few minutes of trade. The Sensex fell 135.03 points or 0.18 per cent to close at 75,183.36. The index opened with a gap-up of 171 points, buoyed by positive global sentiment following Nvidia’s earnings and tentative progress in US-Iran negotiations, but selling pressure emerged steadily from the 23,850 zone and persisted through the session.

Broader markets held up better. The Nifty Smallcap 100 advanced 0.63 per cent, while the Nifty Midcap 100 ended marginally lower by 0.04 per cent. Market breadth stayed positive for the third consecutive session, with the BSE advance-decline ratio at 1.37 and 290 stocks in the Nifty 500 ending in the green. India VIX declined 3.35 per cent to close at 17.82, suggesting cooling volatility even as benchmark indices struggled.

Sectorally, Realty, Cement, Consumer Durables, and Healthcare ended with gains, while IT, FMCG, and Media faced selling pressure. Nifty IT, despite surging 3.2 per cent on the day, did not prevent the broader index from slipping, as profit booking hit heavyweights. Bajaj Finance, Hindustan Unilever, and Tech Mahindra were among the notable laggards, while Grasim, IndiGo, and Apollo Hospitals topped the gainers list.

The standout of the session was the rupee, which snapped a nine-day losing streak to appreciate 62 paise against the dollar, making it Asia’s best-performing currency on the day. The recovery was aided by a pullback in crude oil prices and RBI intervention. However, the rupee had earlier breached the 96.50 per dollar mark, and elevated Brent crude continues to exert pressure on India’s import bill, current account, and inflation trajectory.

On the macro front, Bajaj Finserv AMC’s fixed income head Siddharth Chaudhary noted that “...growth moderation is expected to anchor yields, while supportive liquidity should prevent any disorderly rise in rates,” signalling that the RBI is likely to hold rates even as external pressures mount. FPI outflows, while moderating to ₹70,000 crore in April from ₹1.2 lakh crore in March, continue to weigh on sentiment.

Looking ahead, markets face a packed agenda. The first quarter CY2026 GDP growth rate is due, and all eyes remain on the RBI’s June monetary policy decision, progress in US-Iran talks, and crude oil price direction. Until a decisive close above the 23,800–24,000 resistance band is established, analysts expect the market to remain range-bound with a stock-specific approach likely to dominate.

Published on May 21, 2026