Stock market recap: The Indian equity market staged a dramatic recovery in the afternoon, with Nifty 50 surging 1.24% to close at 24,330.95. This nearly 300-point rally was largely fueled by reports of a potential US-brokered deal to de-escalate tensions in West Asia, which significantly boosted investor sentiment.
The recovery was broad-based, as reflected by a decisive advance-decline ratio of 2,457 gainers to 843 losers. Sectoral performance saw Nifty PSU Bank (up 2.84%) and Nifty Realty (up 2.63%) lead the charge, while Nifty Financial Services and Private Bank indices gained more than 2.4% each.
In contrast, Nifty FMCG was the sole laggard, ending the day marginally lower. The market's ability to bounce back from an intraday low below 24,000 to finish at its daily peak underscores strong domestic resilience against global volatility. This shift toward optimism suggests that while geopolitical headlines continue to drive short-term fluctuations, the underlying appetite for quality domestic cyclicals remains robust as the market digests evolving international developments.
Two stock recommendations by MarketSmith India:
Buy: India Glycols Limited (current price: ₹1,083)
- Why it’s recommended: The company has a diversified business across chemicals, spirits, and nutraceuticals, along with a strong presence in bio-based green chemicals and is expected to benefit from ethanol-blending growth in India. The company also has integrated manufacturing operations, export opportunities in specialty chemicals, improving demand from pharma and FMCG sectors, expansion into high-margin specialty products, a long operating history with an established customer base, government support for renewable and green products, and potential margin improvement from a premium product mix
- Key metrics: P/E: 30.68, 52-week high: ₹1,222.00, volume: ₹52.98 crore
- Technical analysis: Trendline Breakout
- Risk factors: Key risks include high dependence on molasses and raw material prices, the cyclical nature of the chemical business, margin pressure from volatile input costs, regulatory risks in the alcohol and chemical segments, concerns related to debt levels and interest cost, environmental compliance risks, competition from domestic and global players, earnings volatility due to commodity price swings, dependence on government ethanol policies, and arising from its export business
- Buy: ₹1,080–1,100
- Target price: ₹1,270 in two to three months
- Stop loss: ₹1,020
Buy: Amber Enterprises India Limited (current price: ₹8,661)
- Why it’s recommended: The company is a leading OEM player in room air conditioners and a strong beneficiary of the Make in India theme, with an expanding electronics manufacturing business, and benefits from PLI schemes for white goods and electronics. The company is witnessing strong growth in its EMS segment, has a diversified customer base with major brands, and is supported by rising AC penetration in India. Strategic acquisitions are boosting their capabilities, while strong revenue growth visibility, increasing focus on high-margin electronics products, capacity expansion across segments, and long-term growth opportunities in consumer durables further strengthen its outlook.
- Key metrics: P/E:140.11, 52-week high: ₹8,730.00, volume: ₹521.23 crore
- Technical analysis: Cup-with-handle base breakout
- Risk factors: Risks include high dependence on seasonal AC demand, thin operating margins in the OEM business, customer concentration risk, high competition in EMS and RAC segments, raw material price volatility, elevated valuation compared to peers, high working capital requirements, debt and capex pressure, execution risks in new businesses and acquisitions, demand slowdown impacting earnings sharply, dependence on government incentives and PLI schemes, and profitability volatility despite revenue growth.
- Buy at: ₹8,600–8,800
- Target price: ₹11,000 in two to three months
- Stop loss: ₹7,850
How the benchmark index performed on 6 May
Indian equities ended firmly higher on 6 May, with benchmark indices rebounding sharply in the second half of the session amid broad-based buying in financials, autos, and healthcare stocks.
Nifty 50 advanced 298.15 points, or 1.24%, to close at 24,330.95 after recovering from intraday lows near 24,000, while Sensex posted strong gains as investor sentiment improved through the afternoon trade.
Market breadth remained decisively positive, with 2,457 stocks advancing 843 stocks declining, reflecting strong participation across the broader market. On the sectoral front, PSU banks, realty, financial services, auto, and pharma emerged as key outperformers, each rising more than 2%, while FMCG was the only notable laggard. Midcap and healthcare counters also witnessed healthy buying interest, indicating sustained risk appetite beyond frontline names.
Price action remained constructive throughout the latter half of the session, as the index decisively moved above its short-term declining trendline, suggesting an improvement in near-term momentum. The index also reclaimed its 20-DMA, reflecting strengthening short-term sentiment. Although it continues to trade below the broader medium-term moving averages, indicating that the larger trend remains in a recovery phase rather than a confirmed uptrend.
Momentum indicators further support the improvement of the undertone. The Relative Strength Index (RSI) has moved higher to around 55, crossing above its signal average and indicating a gradual shift from neutral to positive momentum without entering overbought territory.
Meanwhile, the MACD remains in positive crossover territory, with the histogram sustaining above the zero line, highlighting continued bullish momentum and easing downside pressure. Volumes also improved alongside the breakout attempt, reinforcing the credibility of the move.
According to O’Neil’s methodology of market direction, the Indian equity market transitioned to a “Confirm Uptrend” from a “Rally Attempt.
Nifty 50 is approaching a crucial near-term zone where price action is likely to remain decisive for directional bias. On the upside, the index may face initial resistance in 24,300–24,600, while a stronger supply zone is positioned around 24,800–25,000, where the convergence of multiple key moving averages could act as a hurdle to sustained upward momentum in the near term.
On the downside, immediate support is seen near 23,800, followed by a more significant cushion in 23,500–23,550, which closely coincides with the 21-DMA and is expected to provide a strong technical base during any corrective phase.
How the Nifty Bank Performed
Today, Bank Nifty delivered a stellar performance, surging 2.63% to settle at 55,981.05 as it reclaimed substantial ground during a powerful afternoon rally. The 1,434-point jump was largely fueled by optimism surrounding a potential US-brokered de-escalation of tensions in West Asia, which triggered a sharp short-covering move across high-beta financials.
Market breadth within the banking space was overwhelmingly positive, with Yes Bank (+7.71%) and IndusInd Bank (+4.10%) emerging as the top performers. Major heavyweights provided significant structural support, with SBIN climbing 3.69% and Axis Bank rose 3.25%, and HDFC Bank adding more than 3% to close near its daily high. The index's ability to bounce from an intraday low of 54,587 and close near its peak suggests strong institutional appetite and a decisive shift in sentiment.
The index managed to reclaim its short-term declining trendline, indicating a revival in buying interest across banking counters. The sharp intraday recovery from lower levels, coupled with a close near the day’s high, reflects a strengthening price structure and renewed bullish participation. The index has also moved back above its 21-day moving average, suggesting improving near-term sentiment. Although it continues to trade below key medium-term moving averages, keeping the broader trend in a recovery mode. From a momentum standpoint, the Relative Strength Index (RSI) has turned higher. It is currently hovering near 53, crossing above its signal line and indicating a gradual shift toward positive momentum. Importantly, the RSI remains comfortably away from overbought territory, leaving room for further upside participation if buying interest sustains. Meanwhile, the MACD indicator is showing early signs of stabilization after a corrective phase, with the histogram narrowing on the downside and the signal lines approaching a potential bullish crossover.
On the technical front, Bank Nifty continues to exhibit a cautiously improving setup following the recent rebound in price action. Immediate support for the index is placed around the 54,200 mark, while a stronger demand zone lies in 53,500–53,000, where buying interest previously emerged during the recent corrective phase. On the upside, 57,300 remains a crucial hurdle, as the index is likely to witness selling pressure near this zone.
MarketSmith India is a stock research platform and advisory service focused on the Indian stock market. It offers tools and resources to help investors make informed decisions based on the CAN SLIM methodology, founded by legendary investor William J. O'Neil. You can access a 10-day free trial by registering on its website.
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Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.