Indian benchmark indices gave up early gains and were trading with minor gains during the afternoon session on May 21, weighed down by weakness in financial and metal stocks. The India VIX—often referred to as the fear gauge—climbed 3 percent, reflecting increased caution among investors.
By around noon, the Sensex was up 249.40 points or 0.31 percent at 81,435.84, while the Nifty gained 69.40 points or 0.28 percent to trade at 24,753.30. Market breadth remained negative, with 1,607 stocks advancing, 1,735 declining, and 125 unchanged.
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The broader markets showed mixed signals. Midcap stocks held up relatively better than smallcaps, which saw some pressure.
Among sectors, Nifty Pharma remained the top performer, although it trimmed some of its early gains. Investor interest in the sector was supported by strong March quarter earnings from companies such as Torrent Pharma and Aster DM Healthcare. A recent rise in Covid-19 cases, particularly the 95 new cases reported in Mumbai this month, also spurred a shift toward healthcare names.
Nifty Realty was another standout sector, gaining around 1 percent. The rally was led by stocks such as DLF, Macrotech Developers, Godrej Properties, and Oberoi Realty.
On the flip side, Bank Nifty extended its downward trend, dragged down by losses in shares of SBI, Kotak Mahindra Bank, and Axis Bank.
Analysts at ICICI Securities noted that Nifty appears to be undergoing a healthy retracement after last week’s sharp rally.
“The elongation of rallies followed by shallow retracements clearly highlights a robust price structure. We continue to maintain our positive stance and expect Nifty to move toward the 25,500 mark in the coming months. Any decline from current levels should be viewed as a buying opportunity, with strong support seen at 24,200,” the brokerage said in a note.
Meanwhile, after foreign institutional investors (FIIs) recorded the biggest outflows in over two months on the previous day, market expert Sunil Subramaniam told Moneycontrol that the trend is not a major concern and is likely to be temporary.
“There is no cause for concern at this time. FIIs are booking profits because valuations had become stretched due to the recent market run-up. This is a short-lived phase and should reverse in the medium term,” Subramaniam said.
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