Stock market recap: The benchmark Nifty 50 had a volatile and weak trading session on Friday, 8 May, opening with a sharp gap-down at 24,233.65 and closing 146.15 points lower, or 0.60%, at 24,180.50, slipping below the key 24,200 mark.
Sentiment remained under pressure amid escalating geopolitical tensions between the US and Iran, which heightened global risk aversion and pushed Brent crude oil prices higher. The surge in crude also weighed on the Indian rupee, which weakened to 94.48 against the dollar, stoking concerns over sustained foreign institutional investor (FII) outflows.
Heavy profit-booking in banking and oil heavyweights such as State Bank of India and HDFC Bank further dragged the index lower, while modest gains in defensives like IT were not enough to offset the broader market weakness.
Two stock recommendations by MarketSmith India for 11 May:
Buy: eClerx Services Ltd (current price: ₹1,668)
- Why it’s recommended: strong presence in KPO and digital operations, a healthy cash-rich balance sheet, consistent profit margins and ROE, and remains a debt-free company, with a strong client base in global markets, increasing demand for digital transformation services, good free cash flow generation, stable dividend payouts, a scalable business model, strong execution and operational efficiency, benefits from the outsourcing trend, and an experienced management team
- Key metrics: P/E: 22.39, 52-week high: ₹2,497.50, volume: ₹109.81 crore
- Technical analysis: Reclaimed 50 DMA with above average volume
- Risk factors: heavy dependence on overseas clients, currency fluctuation risk, client concentration risk, slowdown in US/Europe economies impacting growth, high employee attrition risk, rising competition in the IT/KPO sector, dependence on BFSI and telecom sectors, margin pressure due to wage inflation, automation and AI reducing some service demand, limited pricing power in certain segments, regulatory and data security risks, and high midcap stock volatility
- Buy: ₹1,660-1,684
- Target price: ₹1,950 in two to three months
- Stop loss: ₹1,520
Action Construction Equipment Ltd (current price: ₹947)
- Why it’s recommended: strong exposure to India’s infrastructure and capex growth, leadership in the cranes segment, a diversified product portfolio, healthy revenue and profit growth, strong ROCE and ROE, and a low debt or near debt-free balance sheet, while also gaining from government infrastructure spending, expanding export opportunities, improving operating margins, a strong dealer and distribution network, capacity expansion for future growth, and rising mechanisation demand in India
- Key metrics: P/E:25.51, 52-week high: ₹1,389.00, volume: ₹403.82 crore
- Technical analysis: Reclaimed 100 DMA with above average volume
- Risk factors: highly cyclical nature of its business, dependence on the infrastructure spending cycle, raw material price volatility, slowdown in construction activity affecting demand, expensive valuations at times, competition from global equipment players, export demand uncertainty, economic slowdowns delaying capex orders, margin pressure during weak demand periods, indirect dependence on government projects, working capital intensity, and high stock volatility during midcap corrections
- Buy at: ₹940-955
- Target price: ₹1,070 in two to three months
- Stop loss: ₹890
Nifty 50 performance on 8 May
The Nifty 50 witnessed a weak and volatile trading session, opening on a negative note at 24,233.65 amid cautious global cues. The index remained under pressure throughout the day, touching an intraday high of 24,253.80 before slipping to a low of 24,126.65 and eventually settling at 24,176.15, down 150.50 points or 0.62%.
The inability to sustain above the 24,250 zone triggered profit booking at higher levels, particularly in heavyweight banking and financial counters. Although the index attempted a mild intraday recovery from lows near 24,125, selling pressure resurfaced in the latter half of the session, keeping sentiment subdued. Technically, the formation of a bearish candle near short-term resistance reflects hesitation among bulls and signals cautious positioning ahead of fresh domestic and global triggers.
From a momentum perspective, the RSI (14) is placed near 52.40, indicating neutral conditions with a slight positive bias. It continues to hold above the key 50 mark, suggesting that the broader undertone remains stable despite near-term weakness. Meanwhile, the MACD remains in positive territory, with the MACD line marginally above the signal line, indicating sustained but moderating bullish momentum. However, narrowing histogram bars point to a slowdown in upside strength. The absence of a strong bearish crossover suggests the recent decline is more consistent with consolidation rather than a confirmed trend reversal. That said, momentum indicators also point to a likely range-bound phase unless a decisive breakout emerges.
According to O’Neil’s Market Direction framework, the Indian equity market has transitioned to a “Confirm Uptrend” from a “Rally Attempt.”
On the technical front, immediate support for the Nifty 50 is placed near 24,100, followed by stronger support around 24,000 and the 21-day EMA zone near 24,060. On the upside, resistance is seen at 24,300, while a decisive breakout above 24,500 could revive stronger bullish momentum toward higher levels.
In the near term, market direction is likely to remain driven by global developments, particularly geopolitical tensions in the Middle East, crude oil price movements, and FII activity. Rising crude prices and rupee weakness continue to pose risks for domestic equities. However, improving market breadth, stable earnings expectations, and resilience in IT stocks could help limit downside pressure, keeping the broader trend cautiously positive unless key support levels are breached decisively.
Nifty Bank's performance
The Nifty Bank index witnessed a weak trading session, opening on a negative note amid sustained selling pressure in frontline banking counters. The index opened at 55,783.95 and briefly attempted a recovery toward the intraday high of 55,797.70 during early trade. However, profit booking at higher levels dragged the index lower as the session progressed.
It slipped to an intraday low of 55,062.50 before settling at 55,310.55, down 736.85 points or 1.31% on the day. The formation of a bearish candle near key moving averages signals cautious positioning among traders ahead of fresh directional triggers. Elevated volatility and persistent weakness in heavyweight private banks continued to weigh on sentiment, while broader participation remained selective.
From a technical standpoint, the RSI (14) is placed near 48.56, indicating neutral-to-bearish momentum, with the oscillator slipping below its signal line. This reflects weakening buying strength and a lack of sustained upside traction in the near term. Meanwhile, the MACD remains below the zero line, with a flattening histogram after a brief recovery attempt, pointing to fading bullish momentum and the risk of renewed downside pressure. The absence of a strong bullish crossover keeps the broader bias cautious. Additionally, the index continues to trade below its 50-day, 100-day, and 200-day exponential moving averages, reinforcing a weak medium-term structure despite intermittent pullback rallies.
Technically, immediate support for the Nifty Bank is placed in the 55,000–54,800 zone, followed by a stronger support area near 54,300. On the upside, resistance is seen around 55,500, with a crucial supply zone in the 56,000–56,200 range where multiple moving averages are clustered. A decisive breakout above this band could trigger short-covering and improve sentiment toward 57,000. Conversely, failure to sustain above 55,500 may invite renewed selling pressure.
Going ahead, global uncertainty, institutional flows, bond yield movements, and upcoming macroeconomic cues are likely to shape sectoral sentiment. Unless banking heavyweights regain momentum decisively, the index may continue to see range-bound to mildly bearish price action over the next few sessions.
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.