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Market likely to consolidate in broader range amid volatility

ICICIdirect Research 02 May 2025 DISCLAIMER

Equity benchmark witnessed largely a lackluster week amid stock specific action and settled the truncated week with marginal gains. The Nifty index relatively outperformed the Broader market as it gained 1.5%. Meanwhile, beaten down Infra & Realty index witnessed pickup activity where it gained, 3% and 3.5% respectively for the week 

What to expect: In the upcoming week, we expect volatility to remain elevated tracking geopolitical worries wherein Nifty is likely to consolidate in the broader range of 24500-23500 zone. Only sustained close above 24500 will further fuel the rally towards the psychological mark of 25000. Supports are placed at 23800-23500 zone.

May mayhem: There has been an ancient market saying of “sell in May and go away”. However, the historical data suggests that the Nifty has witnessed positive returns in 9 out of 12 years (2013-2024) with an average return of 2.1%. This makes us believe that any dip amid volatility should be capitalized a buying opportunity.

Market Breadth: The current up move is backed by the improvement in market breadth as well. The percentage of stocks above 50 and 200 days SMA have jumped to 70% and 30% after bottoming out at bearish extreme (at 7%) in last month. The across sector participation bodes well for durability on ongoing rally.

Key monitorable which would act as tailwind:

  • Bilateral Trade Agreement between India and US
  • Continuation of FII's inflow
  • Further strengthening of Rupee post 1.5% of correction in last week augurs well for equity market.
  • Decline in Brent crude oil prices

Gold: Gold has corrected 8% since setting fresh high of $3509.90/oz in Apr-25. Additionally, the rising hopes for President Trump’s administration signing trade deals in near term has reduced demand for safe heaven assets. Hence, temporary breather post 35% of up-move cannot be ruled out wherein psychological mark of $3000 would act as key support.

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