Just a day after a sharp sell-off, bulls staged a strong comeback on May 22, with benchmark indices Nifty and Sensex rebounding sharply, led by a rally in banking, IT, and metal stocks. The upbeat sentiment spilt over to the broader markets as well, with mid and smallcap indices gaining up to nearly a percent in intraday trade.
At close, the Sensex was up 769.09 points or 0.95 percent at 81,721.08, and the Nifty was up 243.45 points or 0.99 percent at 24,853.15. About 2222 shares advanced, 1571 shares declined, and 154 shares unchanged.
“The recovery, especially in IT stocks, indicates that fears related to rising yields may be easing,” said Aishvarya Dadheech, Founder and CIO of Fident Asset Management. He noted that while elevated bond yields could lead to near-term consolidation, India's solid macro fundamentals and strong growth trajectory continue to support the market.
Volatility remained contained despite global uncertainty. The India VIX — the market’s fear gauge — rose marginally by 1 percent to 17. According to Dadheech, this modest uptick in volatility, along with the recent outperformance of broader indices over large-caps, points to underlying market resilience.
Sectoral indices were largely in the green. FMCG stocks led the rally with a 1.58 percent rise in the Nifty FMCG index, followed by a 1.48 percent jump in IT stocks. Private banks saw strong buying, pushing the Nifty Private Bank index up by 1.01 percent. Nifty Bank gained 0.81 percent, while the Nifty Energy, Infra, Media, and Metal indices also posted gains of around 0.85–0.97 percent. Auto, Realty, and Consumer Durables recorded modest upticks. The only significant laggard was Nifty Pharma, which declined by 0.68 percent.
The Nifty Midcap 100 advanced 0.63 percent and the Smallcap 100 index rose 0.88 percent. Year-to-date, the midcap index is now less than 1 percent away from turning positive, while smallcaps are still down 6 percent.
One of the most talked-about moves came from BSE shares, which fell 65 percent on May 23 as the stock turned ex-bonus for its 2:1 bonus issue. Investors holding shares as of May 22, 2025, are eligible to receive two fully paid bonus shares for every one share they own.
Meanwhile, shares of Sun Pharma dropped 3 percent after the company reported a one-time charge and exceptional tax expense related to its US business restructuring. On its Q4FY25 earnings call, the management adopted a cautiously optimistic tone for FY26, highlighting plans for focused specialty investments, disciplined R&D, and selective expansion, though global uncertainties remain a key overhang.
Bondada Engineering also hit the upper circuit, rising 10 percent after announcing a Rs 9,000 crore project win from the Andhra Pradesh government.
On the technical front, both Nifty and Sensex have formed bearish candles on daily charts and continue to show a lower top formation on intraday charts, which is a negative signal, according to Shrikant Chouhan of Kotak Securities. He said a deeper correction may only materialise if the indices fall below 24,450 (Nifty) or 80,450 (Sensex), or breach their 20-day simple moving averages. On the upside, key resistance levels are seen at 24,650–24,750 for the Nifty and 81,100–81,300 for the Sensex. A breakout above these zones could trigger a pullback rally toward 24,850–24,900 and 81,500–81,800, respectively. However, a drop below 24,450/80,450 may see the benchmarks retest lower support levels of 24,380–24,165 and 80,000–79,500.
Top gainers on the Nifty included Eternal, Jio Financial, HDFC Life, ITC, and SBI Life Insurance, while the losers were Sun Pharma and Mahindra & Mahindra.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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