Weak global cues and a lacklustre earnings season have kept the benchmark indices Nifty 50 and Sensex range-bound in trade on Monday, May 19. However, volatility and caution in the market jumped sharply.
At 11:41 am, the Sensex was down 59.89 points or 0.07 percent at 82,270.70, and the Nifty was down 7.05 points or 0.03 percent at 25,012.75. About 2,440 shares advanced, 1039 shares declined, and 156 shares were unchanged.
Indian markets are seeing caution in response to sobering signals from US market futures following the sovereign ratings downgrade, though local small and midcap stocks are expected to maintain their resilience, said Devarsh Vakil, Head of Prime Research at HDFC Securities.
Nervousness in the markets, measured by the India VIX index, rose 4 percent to the 17.23 mark. A reading over 15 indicates a cautious sentiment, meaning the markets may see sharp, sudden swings.
The broader markets extended their outperformance, with smallcap stocks rallying 1.2 percent, while the midcap index rose around six tenths of a percent.
Most sectors saw positivity in trade, rising despite the muted mood of the mainline indices. PSU banks, pharma and realty stocks jumped around two percent, while IT stocks sulked in the red, impacted by the Moody's downgrade on U.S. credit rating to Aa1, down from Aaa.
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Foreign Institutional Investors (FIIs) recorded their second largest single-day purchase of Indian equities for the calendar year 2025, net buying equities worth Rs 8,831 crore on Friday, May 16. Meanwhile, domestic institutional investors (DIIs) bought stocks worth Rs 5,187 crore, provisional data from the NSE showed.
"FII inflows can continue and the domestic mutual funds sitting on huge cash pile will be eager to buy any dip in the market. This will impart resilience to the market even when valuations are getting stretched", said VK Vijayakumar, Chief Investment Strategist, Geojit Investments.
On the downside, 24,665 and 24,400 or 20-day SMA (Simple Moving Average) would act as key support levels, while 25,100 could serve as an immediate resistance zone for the bulls.
A successful breakout above these levels could push the market toward 25,500. However, if the index falls below 24,400, the uptrend could become vulnerable, said Amol Athawale, Vice-President Technical Research, Kotak Securities.
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