Sensex Down 644 Points, Nifty at 24,609; Tomorrow Nifty Prediction

Markets Close Lower but Recover from Day’s Lows: Key Levels and Outlook for May 23

Indian equity benchmarks closed in the red on Wednesday, May 22, after a volatile trading session marked by sharp intraday declines and partial recovery toward the close.

Despite broad-based selling pressure across major sectors, including IT, FMCG, and auto, the recovery from intraday lows offered a silver lining to investors and traders.

With technical support levels holding for now, market participants are eyeing May 23 for cues on whether the indices can stabilize or if further correction is on the horizon.

Market Summary: Indices End in Red Amid Sectoral Weakness

The Nifty 50 index closed 204 points lower, or 0.82%, at 24,610, after recovering from deeper intraday losses. The BSE Sensex also saw a steep decline of 645 points, or 0.79%, to settle at 80,952.

Meanwhile, the Bank Nifty index slipped 134 points to close at 54,941, although it too staged a strong recovery from the day’s bottom.

The broader market mirrored this weakness, with the Nifty Midcap Index falling 295 points to end at 56,325, indicating that selling pressure was not confined to the large-cap space.

Market breadth was decisively negative, with 41 out of 50 Nifty stocks and 26 out of 30 Sensex stocks ending the session in the red. In the banking space, 9 of the 12 Nifty Bank stocks posted losses.

Adding to investor concerns, the Indian rupee depreciated by 36 paise, closing at ₹86 per US dollar, reflecting cautious sentiment in the currency markets amid global uncertainties.

Sector Performance: Mixed Signals with Defence Stocks Resilient

The sectoral performance on Wednesday highlighted the ongoing rotation and selective investor interest. Defensive sectors and safe-haven plays outperformed, while growth-oriented segments came under pressure:

• Defence stocks bucked the broader trend and continued to trade strong, supported by ongoing optimism around domestic manufacturing and robust order books.
• FMCG and IT stocks led the decline, with rising valuations and global demand uncertainty weighing on sentiment.
• Oil & Gas counters also faced selling pressure, amid volatility in crude prices and mixed signals from global energy markets.
• The auto sector witnessed profit booking after recent gains, while pharma stocks remained under pressure due to concerns around regulatory headwinds and margin stress.

The Bank Nifty, despite ending lower, witnessed significant recovery from intraday lows, reflecting a potential return of buying interest at lower valuations in financial stocks.

Technical Outlook: Key Support and Resistance Levels

According to Mandar Bhojane, Senior Analyst at Choice Broking, the technical picture suggests a cautious but optimistic undertone as long as key support levels are respected. Bhojane shared the following levels for traders to watch in the coming sessions:

Nifty 50

• Immediate support lies at 24,600, which acted as a floor in Wednesday’s session.
• If this level breaks, the next critical supports are at 24,500 and 24,400.
• On the upside, 25,000 is the first significant resistance.
• Further resistance levels are seen at 25,400 and 25,600.

Bank Nifty

• Immediate support is placed at 54,700, followed by 54,400 and 54,000.
• If the index reverses higher, it faces resistance at 55,500, with further hurdles at 55,800 and 56,100.

These levels are crucial for traders deploying short-term strategies, particularly in the run-up to the expiry of monthly derivatives contracts and ahead of any major global macroeconomic data.

Expert Opinion: Markets Still Have Headroom Despite Correction

Despite the negative close, not all analysts are bearish. Goutam Shah, Founder of Goldilocks Premium Research, remains upbeat on the market’s medium-term trajectory. Speaking to CNBC-TV18, Shah stated:

“There is no cause for concern on the technical charts at the moment. The market has not yet entered overbought territory. We believe the Nifty can rally up to 25,600, which could mark a fresh all-time high. The broader market, especially mid- and small-cap stocks, is also showing signs of resilience and may continue to outperform in the near term.”

Shah emphasized that current corrections should be viewed as healthy consolidations, offering opportunities for investors to accumulate quality stocks at more reasonable valuations.

Macro and Global Cues: What to Watch on May 23

Looking ahead, the market’s trajectory on Thursday, May 23, will likely be influenced by both domestic and global factors. Among the key triggers:

• Global markets: U.S. and European market trends, interest rate commentary from the U.S. Fed, and developments in the Middle East will remain key external drivers.
• Crude oil prices: Volatility in Brent crude can affect sentiment in oil-sensitive sectors like paints, aviation, and logistics.
• FII and DII activity: Institutional flows will be closely watched to gauge confidence in Indian equities amid global risk-off moods.
• Currency movement: Continued depreciation of the rupee could raise import costs and pressure companies dependent on global supply chains.

Final Thoughts: Cautious Optimism Amid Volatility

The markets may have closed lower on May 22, but the recovery from intraday lows signals that bulls have not yet given up.

As long as the Nifty holds the 24,600–24,500 zone, technical analysts believe there’s a chance for a rebound. Resistance at 25,000 will be the first test of strength on the upside.

Investors are advised to stay stock-specific and focus on sectors showing relative strength—like defence and select financials—while being cautious in sectors witnessing heavy institutional selling.

With volatility expected to continue, especially ahead of key macro triggers and the upcoming expiry, disciplined trading and portfolio protection strategies will be critical.