Stock market recap: Indian equity markets witnessed heavy selling pressure on Monday, 11 May, with the Nifty 50 falling 1.49% to close at 23,815.85, while the Sensex tumbled more than 1,300 points. Risk aversion intensified after the breakdown of US-Iran peace talks pushed Brent crude above $105 a barrel and dragged the rupee to a record closing low of 95.31 against the dollar.
Investor sentiment was further weighed down by government calls for austerity, including restraint in fuel and gold consumption, stoking concerns over a potential slowdown in discretionary spending.
Market breadth remained decisively weak, with decliners outnumbering gainers by roughly 2.5:1. A total of 2,366 stocks fell, while 963 advanced.
Two stock recommendations by MarketSmith India for 12 May:
Buy: Torrent Pharmaceuticals Ltd (current price: ₹4,517)
- Why it’s recommended: strong presence in chronic therapy segments and a well-established domestic pharma business, with consistent growth in the Indian formulations market and a strong brand portfolio supported by extensive doctor reach. The company benefits from healthy cash flow generation, diversified revenue across geographies, and a strong presence in cardiac and diabetes therapies. Margin improvement through operational efficiency, growing focus on specialty and branded products, a stable balance sheet compared to peers, strategic acquisitions supporting growth, and a strong track record of execution further strengthen its business outlook.
- Key metrics: P/E: 64.31, 52-week high: ₹4,555.10, volume: ₹255.68 crore
- Technical analysis: Flat base breakout
- Risk factors: U.S. FDA regulatory risks for plants and products, pricing pressure in the US generics market, dependence on domestic pharma growth, currency fluctuation impact on exports, high competition in key therapy areas, integration risks from acquisitions, litigation and compliance risks, margin pressure from raw material costs, product concentration in select therapies, slow approvals affecting growth visibility, government price control risks in India, and R&D spending pressure on profitability
- Buy: ₹4,472–4,540
- Target price: ₹5,200 in two to three months
- Stop loss: ₹4,260
Buy: Max Healthcare Institute Ltd (current price: ₹1,040)
- Why it’s recommended: strong brand in the premium healthcare segment, with consistent growth in occupancy and ARPOB, and follows an asset-light expansion strategy through managed hospitals. The company benefits from increasing demand for quality healthcare services, a strong presence in metro and tier-1 cities, a high-margin specialty treatment portfolio, healthy cash flow generation, and improved profitability. Expansion plans support long-term growth, while raising medical tourism opportunities, strong clinical expertise and doctor network, increasing healthcare awareness, and operational efficiency improvements further strengthen its outlook
- Key metrics: P/E:67.43, 52-week high: ₹1,314.30, volume: ₹313.87 crore
- Technical analysis: Reclaimed its 100 DMA on above-average volume
- Risk factors: high dependence on metro city performance, regulatory risks in healthcare pricing, rising employee and doctor costs, expansion execution risks, high capital expenditure requirements, competition from major hospital chains, occupancy slowdown impacting margins, litigation and compliance risks, dependence on skilled medical professionals, insurance pricing pressure affecting profitability, economic slowdown impacting elective procedures, and expensive valuations during weak growth periods
- Buy at: ₹1,030–1,045
- Target price: ₹1,150 in two to three months
- Stop loss: ₹990
Nifty 50 performance on 11 May
Indian equity markets witnessed a broad-based selloff on 11 May, with benchmark indices ending sharply lower amid weakness in financials, autos, PSU banks and realty stocks. The Nifty 50 fell 360.30 points, or 1.49%, to close at 23,815.85 after trading between 23,799.10 and 23,997.45 during the session. The Sensex also ended deeply in the red as investors remained cautious amid persistent risk-off sentiment and ahead of key global macro triggers.
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
Nifty Bank had a weak trading session, opening lower and remaining under pressure throughout the day amid cautious sentiment across the banking sector. The index opened at 54,832.45, touched an intraday high of 55,002.45, slipped to a low of 54,360.70 and eventually settled at 54,439.90, down 870.65 points, or 1.57%.
Selling pressure intensified after the index attempted to stabilise near intraday highs, indicating aggressive profit-booking at elevated levels. The formation of a strong bearish candle on the daily chart points to continued seller dominance. Bank Nifty also remained below its 21-day and 50-day moving averages, highlighting persistent short-term structural weakness.
Broader market sentiment remained cautious amid concerns over global risk appetite, rising bond yields and continued foreign institutional investor outflows from financial stocks.
On the technical indicators front, the RSI on the daily timeframe stood near 43.74 and remained below its signal average of 50.43, indicating weakening momentum and subdued buying interest. The RSI slipping below the equilibrium zone suggests deteriorating short-term sentiment, although the index is not yet in oversold territory.
Meanwhile, the MACD remained in negative territory, with the MACD line at -83.49 staying below the signal line near -76.26, indicating a bearish crossover and continuation of downward momentum. The histogram has also turned marginally negative again, reinforcing the loss of bullish traction. Momentum oscillators suggest that any rebound may continue to face resistance unless strong follow-through buying emerges near key support zones.
Technically, immediate support for Bank Nifty is placed near 54,300, followed by a stronger demand zone in the 53,800–53,500 range. A decisive breach below these levels could accelerate downside pressure towards 53,000.
On the upside, resistance is seen near 55,000 and then around 55,700, where the 50-day moving average is positioned. The index continues to trade below key short- and medium-term moving averages, keeping the broader trend under pressure.
Going forward, volatility is likely to remain elevated amid global macro uncertainty, movements in bond yields and expectations around banking sector earnings. Unless Bank Nifty convincingly reclaims the 55,000–55,700 zone, rallies are likely to face selling pressure, while sustained weakness below support levels could trigger another round of corrective decline.
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.