The Indian stock markets witnessed a significant downturn as the Sensex plummeted over 1,092 points to 74,776 and the Nifty 50 dropped nearly 359 points to 23,547. This decline coincided with an 8% rise in India VIX, indicating heightened market volatility.
The sharp losses erased nearly Rs 6 lakh crore from the total market capitalisation of companies listed on the BSE, bringing it down to Rs 465 lakh crore. Analyst Sudeep Shah from SBI Securities noted that the Nifty's May expiry rollover was below average, suggesting caution among traders. The Nifty traded within a narrow range of 1219 points in May, its smallest since December 2025, with a bearish candle formation on the monthly chart indicating indecisiveness.
The Bank Nifty also experienced a tight trading range of 3,550 points, the narrowest since January 2026. Despite an initial upmove, it failed to sustain above 55,500, leading to a bearish candle formation. The index is currently below key moving averages, indicating a weak bias.
“The Nifty's May expiry rollover was below average, suggesting caution among traders.”
Sudeep Shah, Vice President and Head of Technical & Derivatives Research at SBI Securities
Foreign Institutional Investors (FIIs) showed signs of short covering in index futures, reducing net shorts significantly between 21st May and 27th May. However, a resurgence of short positions on Friday suggests continued caution amid geopolitical uncertainties.
The Nifty IT Index, despite rebounding 8% from its May low, remains range-bound with weak momentum indicators. A breakout above the 29,900–30,000 resistance zone could trigger a stronger rally.
Background
The Indian stock market has been experiencing fluctuations due to ongoing geopolitical tensions and macroeconomic uncertainties. The recent market downturn reflects investor caution and the impact of external factors such as the US-Iran deal and crude oil price stability.
Looking forward, traders are advised to focus on stock-specific opportunities in sectors like private banks, PSU banks, and midcap IT, as the broader market remains range-bound with elevated volatility.
