Indian equity markets opened on a positive note on May 29, trying to reverse two successive sessions of losses. Early signs in the shape of Gift Nifty’s 0.3% gain to 24,813 indicated a strong opening for benchmark Nifty50. The reversal is after a mix of domestic as well as international indications that can chart the course for the market in the short term.
Global Catalyst: US Trade Court Disables Trump-Era Tariffs
Among the largest overseas news fueling equities’ enthusiasm worldwide was the US trade court’s suspension of the sweeping tariff regime of then-President Donald Trump. In a decision ruled by the US Court of International Trade, the move contradicts the justification behind Trump’s imposition of emergency tariffs on many imports.
Even though the ruling has been appealed, the most recent tariff stay is already making a welcome impact on investor sentiment around the globe with US stock futures rising and the dollar firming. The ruling here, particularly if it goes to the US Supreme Court, has the ability to reshape trillions of dollars’ worth of international trade.
Nifty & Sensex: Bids to Bounce Back During Consolidation
Despite weakness during the initial sessions, both Nifty50 and Sensex bounced back on May 29. Nifty scaled 24,850 while Sensex advanced over 500 points in early trade, demonstrating renewed optimism.
But analysts warn that Nifty still continues to be locked between key levels — 24,450 on the lower side and 25,100 on the higher side. Short-term support for Angel One’s Rajesh Bhosale is the 20-day exponential moving average (20DEMA) of 24,600 and a psychological resistance is 25,000.
Bank Nifty: At the Crossroads
Bank Nifty also in focus, and 55,000 the crucial support. A break here could lead to bigger selloff. Conversely, a cross of 55,500 could make bears cover shorts, and the index go up to 56,100.
SAMCO Securities’ analyst Dhupesh Dhameja opines that RSI readings less than 60 are a sign of fading momentum and a form of “sell on rallies” unless bulls convincingly cross 55,500.
Put-Call Ratio Indicators Uncertainty
The Nifty Put-Call Ratio (PCR) fell to 0.76 on May 28 from 0.82 previously. Declining PCR indicates higher risk of selling calls compared to writing puts. This is typically indicative of increasing bearish sentiments. A decline below 0.7 would also indicate declining bullish sentiment.
India VIX Continues to Remain Elevated
In spite of Wednesday’s slight correction, the India VIX – colloquially known as the market fear index – remained high at 18.02, indicating that volatility might last even while the bulls attempt to seize control again.
FIIs & DIIs Keep Buying, But Long-Term Scenario Cloudy
Foreign Institutional Investors (FIIs) put ₹4.662 crore into equities on May 28, as Domestic Institutional Investors (DIIs) delved deeper into their rally with net purchases of ₹7,911 crore. While cumulatively on a year-to-date basis, FIIs have been net sellers to the extent of ₹1.15 lakh crore, DIIs have comfortably covered their outflows with net buying worth over ₹2.61 lakh crore.
US & Asian Markets: Nvidia’s Strength Adds Firepower
Investor sentiment was further boosted by Nvidia Corp’s stunning profits and optimistic outlook, which fueled the chipmaker’s stock to nearly 5% in after-hours trading. This occurred despite worries over US export bans on China.
Asian markets responded by opening on a higher note, with Japan’s Topix index (+1.30%) and the Nikkei 225 futures (+0.94%) leading the charge. European and US futures also improved.
Commodities & Currency Movements
- Crude oil (WTI) rose 0.95% to $62.43/barrel.
- Gold dropped 0.92% to $3,258.63/oz following diminishing safe-haven demand due to increased dollar strength.
- The base metals of copper, nickel, and zinc all declined.
- The US Dollar gained significantly against the euro, yen, and Swiss franc following the tariff action, underpinning bearish sentiment.
Outlook: Selective Buying in Focus
The analysts now anticipate a range-bound consolidation phase in large-cap benchmarks but mid- and small-cap shares remain on the sidelines. Caution, however, is being recommended in the presence of valuation worries and high volatility.
HK Vijayakumar of Geojit Financial Services has pointed out that the US court verdict is a second big setback for Trump tariff policy — a move that will rewrite global trade politics. Meanwhile, he advises investors to stay away from speculative plays in mid and smallcaps and hold on to fundamentally strong names.
FAQs:
- Why did Sensex and Nifty recover on 29 May 2025?
Recovery was performed due to positive world cues, particularly the US trade court move to temporarily halt Trump’s global tariffs, along with massive institutional buying by both FIIs and DIIs. - In what way did the ruling of the US trade court affect world markets?
The ruling put President Trump’s emergency tariff declarations on hold, improving investor sentiment and triggering rallies in US futures, Asian stocks, and the rise of the US currency. - Which are the most important technical levels to keep an eye on Nifty?
Nifty is fluctuating between 24,450 and 25,100. A breakout above 25,100 can experience a bullish trend, while a break below 24,450 can lead to selling pressure. - Support and resistance level of Bank Nifty?
Support at 55,000; a break may result in a selloff. Resistance at 55,500; if broken, it might take the index to 56,100 as short positions are covered. - What does a declining Put-Call Ratio (PCR) indicate?
A declining PCR (now at 0.76) indicates that calls are being sold in larger numbers than puts by traders, which reflects the bias towards bearishness on the options side. - What is India VIX saying about the prevailing market mood?
India VIX is still at 18.02, reflecting increased market volatility and risk-off by investors even in recent rallies. - Is Foreign Institutional Investors (FIIs) bullish on Indian markets at present?
FIIs were net buyers on May 28, buying ₹4,662 crore worth of equities. FIIs are still net sellers in the year so far, indicating cautious optimism. - Which sectors or stocks are to blame for market volatility?
ITC and Reliance Industries were some of the recent losers, but there is selective buying for mid- and small-cap stocks on the strength of positive earnings performance. - How did Nvidia’s earnings influence global mood?
Nvidia’s positive earnings and guidance fueled optimism for the tech sector and AI rally, buoying US futures and Asian equities in a good way. - Is it a good idea for investors to invest in mid- and small-cap stocks now?
Experts are cautioning. While some quality small- and mid-cap stocks are doing well, valuation concerns linger. Investors should not blindly chase momentum.
Conclusion: Watch the Range, Respect the Data
As the expiry session progresses and global markets continue to be volatile, Indian equities would continue to fluctuate within a certain range. Technical levels, institutional flows, and macroeconomic news would be interplayed to determine near-term direction.
Investors need to stay nimble, monitor macro signals, and think risk-adjusted strategies instead of pursuing hot pockets of the market.
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