Stock Market Tumbles After Surge Amid Signs of Strength

S Jha

1 year ago

Spread love

Markets Cool Off After Monday’s Surge: Nifty Drops 1.43% Amid Profit Booking, PSU Banks Shine

By S Jha

MUMBAI, May 13, 2025 — After Monday’s explosive 4% rally, the Indian equity markets took a breather on Tuesday. The benchmark Nifty slipped 346 points or 1.43% to close below the 24,600 mark.

Despite a firm global setup, profit booking and sectoral rotation led to a choppy trading session. Angel One, a stock market brokerage firm, noted that after a tepid start, the Nifty made a brief attempt toward the 25,000 mark early in the day, but momentum faded quickly. As the session wore on, selling pressure intensified, particularly in heavyweight sectors like IT and FMCG.

Key Market Highlights

Sectoral Moves:
BANKNIFTY pared some of Monday’s gains, while PSU banks defied the broader trend, posting impressive gains. IT (-2.42%) and FMCG (-1.34%) were the day’s top laggards. Pharma also lent relative strength, providing a cushion to the market.
Global Influence:
Global markets traded higher, supported by easing trade tensions between the US and China. This optimism spilled over into Asian and European bourses, though Indian indices chose to consolidate recent gains.
Futures & Technicals:
Nifty futures declined 1.59% with a marginal 1.12% rise in open interest, suggesting mild short buildup without strong conviction. India VIX eased to an 8-session low, reflecting cooling volatility. The RSI stood at a still-bullish 60, and the index continues to trade above key EMAs.
Support & Resistance Levels:
Analysts flagged 24450 (50% retracement) and 24330 (61.8% retracement and gap support) as key levels to watch on the downside. Resistance is seen at 24,750 and 24,900. Despite today’s decline, Angel One maintained a positive bias, encouraging a ‘buy on dips’ strategy.
Market Breadth:
In a sign of underlying strength, 277 stocks in the broader Nifty 500 index ended higher. On the Nifty 50, 13 constituents closed in the green, indicating mixed participation.

Corporate Buzz

Cipla Ltd. declared a final dividend of ₹16/share for FY25, payable within 30 days post-AGM, pending shareholder approval.
Siemens India reported a 25% YoY drop in Q2 net profit to ₹674 crore, despite revenue growth.
Kfin Technologies tumbled nearly 7% following large block trades worth ₹1,885 crore across exchanges.
Swiggy Ltd. hit an intraday record low post lock-in expiry for non-promoter shareholders, but recovered slightly to close at ₹310.

Stocks in Focus

Bharat Dynamics Ltd. surged to an all-time high on volume 4x the weekly average — strongest since Sept 2022.
City Union Bank Ltd. closed at its highest since Dec 2022, confirming a multiyear breakout.
Godfrey Phillips edged near an all-time high, with RSI above 70 and strong volumes.
Piramal Pharma Ltd. announced a $90 million investment in two US plants to enhance CDMO capacity, marking its best close in 10 sessions.

Macro Snapshot

India’s retail inflation dropped to 3.16% in April, a near six-year low, largely due to a decline in vegetable and overall food prices — a positive signal for RBI’s monetary outlook. Meanwhile, SoftBank posted a $3.5 billion profit for Q1, aided by global tech investments, though its India-focused Vision Fund 2 saw a 21.7% dip in public holdings.

Outlook:
With Monday’s rally stretching market indicators into overbought territory, today’s dip is being viewed as a healthy correction. As long as key support levels hold, the broader sentiment remains constructive, supported by strong participation in the mid- and small-cap segments. Angel One advises staying nimble but optimistic, sticking to a buy-on-dips approach while keeping an eye on technical support zones.

Disclaimer: This article makes no recommendation for buy or sell of shares of any company.