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Informist, Tuesday, May 5, 2026

 

By Arundathi A R

 

MUMBAI – The benchmark indices are seen consolidating Wednesday after negative sentiment took hold of the market following an upswing in crude oil prices. Crude oil prices coupled with foreign investment flows and rupee levels remain the major factors that decide the market's direction. The March quarter earnings will also dictate market sentiment.

 

Tuesday, the Nifty 50 settled 0.4% lower at 24032.80, down 86.50 points. The BSE Sensex closed 0.3% lower at 77017.79, down 251.61 points. "The Nifty (50) index is concluding the session with an indecisive Doji candlestick on the daily charts," Vipin Kumaar, assistant vice-president of equity research at Globe Capital Market, said. "The short-term chart structure continues to indicate consolidation within the 23800–24350 spot zone, which is likely to persist until this range is breached on either side." Analysts see the Nifty 50 facing resistance at 24500 points and finding support at 23900 points.

 

Discussions between India and Israel for a free trade agreement have been halted following the war in West Asia, a senior commerce ministry official said. After a round of talks in February between the two countries for the agreement, a second round was scheduled to take place this month. The official did not say whether the talks, planned in Israel, would take place as scheduled.

 

There is a high likelihood of a better foreign institutional investment flow environment and even an abatement in outflows will be taken positively by the market once an end to the US-Iran war is in sight, according to a strategy report from Motilal Oswal Financial Services. A full-blown positive flow can lead to sharper rallies, the brokerage said.

 

Foreign investors turned net buyers Monday after a selling spree and bought shares worth INR 28.36 billion. Domestic investors continued supporting the equity market by buying shares worth INR 47.64 billion.

 

The rupee ended at a record closing low for the fourth straight session on escalation in the West Asia conflict. However, dealers said the fall of the Indian currency was limited by the Reserve Bank of India, which intervened through dollar sales actively during the day. "The undervaluation will only start to correct--and the rupee will only meaningfully recover--once Brent eases back below $100 and capital flows turn supportive again. Until then, the path of least resistance for spot remains higher," Anindya Banerjee, head of commodity and currency research at Kotak Securities, said in a note. The Indian currency settled at 95.2800 a dollar Tuesday, 0.2% lower than its previous close.

 

Brokerage YES Securities expects the financial year 2026-27 (Apr-Mar) to be a weather-led and cost-inflation-challenged year for rural India, with the India Meteorological Department's below-normal forecast for the monsoon and rising probability of an El Nino climate pattern posing a risk to the kharif crop output. "Structural improvements (irrigation, diversification), resilient buffer stocks, and proactive policy support--including higher fertiliser subsidies, crop insurance, rural transfers, and credit availability--provide a meaningful cushion to incomes and supply-side volatility," the brokerage said in its report. However, it sees the impact being manageable, with policy support and climatic offsets limiting the downside.

 

S&P Global-owned Crisil sees cash transfers by states emerging as a new buffer for India's household consumption. It expects the cash transfers, along with benefits from the Centre's welfare schemes, to support household consumption in the current fiscal amid inflation risks from higher energy prices and the El Nino situation. "While cash transfers can provide a short-term buffer, improving income prospects are critical to spur organic growth in domestic demand," it said in a report.

 

Capital market company Asit C. Mehta Investment Interrmediates sees the demand trend being healthy across segments of the automobile sector. It expects personal mobility demand to remain resilient, according to its automobile sales report for April. "The key overhang could be higher fuel prices, inflationary pressures, and possible fuel availability/logistics challenges due to geopolitical concerns," it said. The Nifty Auto index settled nearly 1% higher Tuesday.

 

Market participants will watch out for the March quarter earnings of Bajaj Auto, due Wednesday. The company is expected to report a net profit of INR 26.31 billion, up over 28% on year. If the metric meets expectation, it would be the fastest on-year growth in eight years. The top line is estimated at INR 157.80 billion, up 30% on year. The on-year growth expectation on the top line would be the highest in nine quarters. Shares of the company ended nearly 1% lower at INR 10,046 on the National Stock Exchange.  End

 

Edited by Rajeev Pai

 

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