Indian equity markets ended sharply lower on May 29 amid broad-based selling, MSCI-driven flows and rising volatility. Technical indicators suggest a bearish bias with key support zones in focus. Global cues, monsoon outlook and market breadth will be critical in shaping investor sentiment and near-term market direction.
Equity markets saw broad-based selling pressure after weak monsoon forecasts raised concerns over food inflation, though falling crude oil prices and easing bond yields helped limit downside risks. Investors now await key domestic triggers, including the RBI policy decision and GDP data, while analysts have flagged YES Bank and NBCC as stocks with strong short-term bullish momentum and upside potential.
Indian market is at a key inflection point as strong macroeconomic fundamentals support long-term growth, while rapid advances in artificial intelligence raise fresh questions on jobs, industries and investment opportunities. The ET Alpha Wealth Summit in Mumbai will host a major debate on whether India’s next decade will be defined by Amritkaal-led growth or AI-led disruption.
Nifty Mid-Cap 100 stocks are showing strong upside potential, with analyst consensus estimates suggesting 25% to 45% gains over the next 12 months. Based on Trendlyne data, several mid-cap companies across sectors such as e-commerce, real estate, FMCG and infrastructure are attracting Buy and Strong Buy ratings, indicating broad-based market optimism.
However, the trend reversed in March, when foreign investors pulled out a record Rs 1.17 lakh crore. The selling continued in April with net outflows of Rs 60,847 crore and extended into May with withdrawals of nearly Rs 33,000 crore.
Anticipating significant capital raises from tech giants like SpaceX and OpenAI, investors are shifting focus to Asian supply chain companies. This strategic move aims to capitalize on anticipated increased technology spending, particularly in server parts, specialized materials, and power equipment, potentially fueling a new rally in Asian stock markets.
Fourteen penny stocks have declined sharply over the past two months, with losses of up to 55%, highlighting the risks associated with low-priced equities. While such stocks attract investors seeking quick gains, weak liquidity, volatility and governance concerns make them highly vulnerable to sharp corrections and capital erosion.
Nippon India Mutual Fund's Rupesh Patel remains constructive on midcaps despite concerns over valuations, citing resilient earnings growth and improved valuation comfort after a prolonged time correction. He favours financials, consumer discretionary and select industrials, while emphasising a bottom-up stock-picking approach to navigate geopolitical and macroeconomic uncertainties.
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