Sensex, Nifty shave gains from day's highs; metal, pharma stocks drag

Despite the pullback, market breadth stayed positive

Benchmark indices Sensex and Nifty came sharply off their day's highs during the afternoon session on May 2, dragged lower by weakness in metal, pharma, and consumer stocks. Broader markets also pared gains and hovered around the flatline with a slight positive bias through mid-session.

Around noon, the Sensex had retreated over 650 points from its intraday peak of 81,177, while the Nifty 50 had dropped about 252 points from the day’s high of 24,589. Despite the pullback, market breadth stayed positive, with 1,707 stocks advancing, 1,559 declining, and 129 remaining unchanged.

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Among sectoral indices, Nifty IT continued to trade in the green but gave up part of its early gains. Shares of TCS, Infosys, and HCL Technologies were up by as much as 1 percent after Cognizant Technology Solutions delivered better-than-expected first-quarter results and raised its full-year revenue forecast, citing strong demand for AI-powered IT services.

The Bank Nifty index also cooled off from its day’s high during intraday trade, as several lenders reported their March quarter results. Shares of State Bank of India (SBI) were up 1 percent ahead of its Q4 earnings announcement. Brokerages are anticipating a double-digit decline in annual profit, weighed down by lower treasury gains and margin pressures arising from elevated funding costs.

After briefly reclaiming the 24,500 mark, the Nifty slipped below 24,400 during intraday trade. Shrikant Chouhan, Head of Equity Research at Kotak Securities, noted that market sentiment is likely to remain weak unless the index sustains above the 24,450 level.

"From a technical standpoint, the market has been facing consistent selling pressure near the 24,450 resistance zone. A double top pattern has also formed on the intraday chart, pointing to possible short-term weakness. The index may see further downside, potentially drifting toward 23,900," Chouhan said.

VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, echoed the cautious tone. He pointed out that given the combination of stretched valuations—Nifty currently trades at over 20 times estimated FY26 earnings—and rising geopolitical tensions with Pakistan, the near-term risk-reward ratio does not favour aggressive investing.

“In this scenario, investors could consider increasing the cash component in their portfolios while staying invested in the market,” he advised.

Still, Vijayakumar acknowledged some macro positives, including falling interest rates in India, a drop in crude oil prices, and early signs of a demand recovery, which could offer some support to the market.

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