Stock Market Today: Will Nifty50 And BSE Sensex Rebound After Volatile Week? Key Levels To Watch

The Indian stock market is expected to open on a positive note today, May 23, as indicated by the GIFT Nifty, which signals early optimism. This comes after a day of turbulence that saw Indian benchmark indices slip into the red, despite a sharp rebound mid-week.

On Thursday, May 22, both the Sensex and Nifty opened lower and witnessed significant intraday declines of over 1%, led by heavy selling in key heavyweights including Reliance Industries, along with financial and IT stocks. The broader market sentiment was dampened by rising U.S. treasury yields and renewed concerns over the U.S. fiscal deficit.

Bulls and Bears Tug-of-War Continues
Domestic equities have been oscillating between gains and losses this week. After breaking a three-day losing streak on Wednesday with healthy gains, the market reversed course on Thursday, underscoring ongoing volatility.

 

"On the weekly expiry day, the benchmark index Nifty opened with a downside gap and extended its decline in early trade. However, it found support near its crucial 20-day EMA and staged a sharp recovery of nearly 150 points," said Sudeep Shah, Deputy VP and Head of Technical & Derivatives Research at SBI Securities.

Nifty eventually closed at 24,609, down 0.82%, forming a bearish candle on the daily chart with a prominent lower shadow — a sign of buying interest near its moving average support.

Key Technical Levels to Watch
According to Shah, the 24,500–24,480 range will act as immediate support. A breach below this could push the index toward the next support at 24,350–24,330.

On the flip side, resistance is expected in the 24,720–24,750 zone. Sustained movement above 24,750 may pave the way for a short-term rally towards 24,880.

Meanwhile, Sensex mirrored this pattern, rebounding after testing its 20-day EMA. Shah noted, “The zone of 80,600–80,500 will act as immediate support for the index. On the upside, 81,300–81,400 will be a crucial hurdle.”

India VIX, the volatility index, declined by 1.65% to close at 17.25. Shah stated, “It is currently oscillating near the 20 and 50-day EMA levels. The 18–18.20 zone will act as a hurdle, while 16.80–16.50 is a key support.”

From the derivatives perspective, May futures dipped by 0.72%, while combined Open Interest across all series surged 1.74%.

FIIs vs DIIs Activity
In the cash segment on Thursday:
Foreign Institutional Investors (FIIs) were net sellers to the tune of Rs 5,045.36 crore
Domestic Institutional Investors (DIIs) bought shares worth Rs 3,715 crore

Shah noted, “FIIs’ long-short ratio for index futures is at 31.94, with net selling of 17,720 index futures.”

Sectoral Outlook: Winners and Losers
Sectors showing strength and likely to outperform in the short term include:
Nifty India Defence
CPSE
PSE
Metal
PSU Bank
Realty

On the contrary, Nifty FMCG broke below its 200-day EMA, which could lead to short-term underperformance, as per Shah.
 
U.S. Market Cues: Mixed Signals as Deficit Concerns Mount
U.S. markets closed mixed on Thursday amid fears of rising interest rates and a ballooning deficit.
The Dow Jones slipped 1.35 points to 41,859.09
The S&P 500 declined by 0.04% to 5,842.01
The Nasdaq rose by 0.28% to 18,925.73

“All three major U.S. indices traded mostly higher for much of the session but lost momentum late in the day,” Shah said. “The benchmark 10-year Treasury yield initially surged to a three-month high but retreated, briefly boosting sentiment.”

Read More 
Stocks To Watch Today: ITC, Sun Pharma & Honasa, Among Key Movers

The daily RSI of the S&P 500 is currently flat, indicating consolidation. Shah expects the 5,900–5,920 zone to be a key resistance, while 5,800–5,820 could offer immediate support.

Global Commodities and Currency Trends
Brent Crude declined for the second straight session, trading below its 20-day EMA. Resistance lies at $65–65.20, and support at $63–62.80.
The U.S. Dollar Index (DXY) gained 0.21% on Thursday, with resistance at 100.30–100.40 and support at 99.20–99.00.

Asian Market Round-Up
Asia-Pacific markets mostly advanced on Friday, tracking a slew of regional economic data:
Japan’s Nikkei 225 rose 1.04%
Topix added 0.89%
South Korea’s Kospi was up 0.36%; Kosdaq dipped 0.34%
Australia’s S&P/ASX 200 climbed 0.33%
Hong Kong’s Hang Seng and China’s CSI 300 were flat at open
Japan’s core inflation accelerated to 3.5% in April, driven in part by soaring rice prices. This may influence the Bank of Japan’s stance on interest rates.

Investors are also watching for:
South Korea’s April PPI data
New Zealand’s Q1 retail sales
Singapore’s April inflation figures
Taiwan’s industrial output report

Trading Outlook for the Day
Despite Thursday’s weakness, Friday’s trade is likely to start on a positive note. GIFT Nifty and supportive technical cues hint at early gains, though volatility may persist amid global uncertainties.

Disclaimer

The views expressed in this article are purely informational and Republic Media Network does not vouch for, promote or endorse any opinions stated by any third party. Stock market and Mutual Fund investments are subject to market risks and readers are advised to seek expert advice before investing in stocks, derivatives and Mutual Funds