Markets began cautiously on Tuesday, May 26, with the Sensex declining by 59 points to 76,429.91 compared to its previous close of 76,488.96. The index opened at 76,224.14. The Nifty 50, which closed at 24,031.70 on Monday, began trading at 24,004.10 before moving slightly to 24,019.15, down by 12.55 points or 0.05 percent as of 9:25 a.m. IST. This subdued opening follows a significant rally on Monday, where the Sensex surged by 1,073 points and the Nifty gained 312 points, or 1.32 percent, closing above the crucial 24,000 mark.
The trading session today carries heightened risk due to the monthly Nifty futures and options (F&O) expiry, with the BSE expiry set for Wednesday and markets closed on Thursday. Analysts expect that expiry-driven positioning will overshadow fundamental factors in intraday trading.
Amidst this market backdrop, fresh U.S. military actions in Southern Iran have contributed to a tense diplomatic atmosphere. Crude oil prices reversed their earlier decline, with August Brent futures rising by 1.70 percent to $95.01 per barrel and July WTI increasing by 1.35 percent to $91.53 as of 9:16 a.m. on Tuesday. On the Multi Commodity Exchange, June crude futures were up by 1.51 percent at ₹8,756, while July futures gained 1.29 percent to ₹8,535. Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, noted that ongoing negotiations to resolve the West Asia conflict appear to be stalling, particularly following the U.S. strikes, which could dampen market sentiments.
Monday’s market rally was fueled by optimism surrounding potential advancements in U.S.-Iran peace talks, spurred by President Donald Trump’s remarks that discussions were “proceeding nicely.” Following a holiday, South Korea’s Kospi index surged nearly 3 percent, and U.S. Dow futures climbed more than 400 points as falling oil prices boosted overall market sentiment. Additionally, the Indian rupee rebounded from a historical intraday low of 96.60 against the dollar, stabilizing around 95.20.
Vijayakumar emphasized that each instance of positive news suggesting an end to the conflict, combined with a drop in crude prices, has prompted market rallies. He pointed out that a resolution to the conflict and a significant decline in crude prices could substantially mitigate the macroeconomic challenges currently facing the economy.
In early trading among Nifty 50 gainers, Coal India led with a 1.55 percent increase, trading at ₹465.10 compared to its previous close of ₹458.00. ONGC rose by 0.97 percent to ₹287.70, Infosys increased by 0.90 percent to ₹1,179.00, Hindalco climbed by 0.85 percent to ₹1,109.00, and Tech Mahindra was up 0.74 percent at ₹1,446.10. Conversely, healthcare stocks drew attention on the downside, with Max Healthcare falling 1.08 percent to ₹990.05, Apollo Hospitals dropping 1.00 percent to ₹8,320.00, and Sun Pharma declining 0.89 percent to ₹1,824.20. Telecom giant Bharti Airtel saw a decrease of 0.89 percent to ₹1,858.10, while IndiGo shed 0.86 percent to ₹4,463.10.
Sector-wise, Monday’s session displayed widespread gains, particularly in the PSU Bank index, which rose by 3.10 percent. The Bank Nifty closed at 55,293.65, up 1,238 points or 2.29 percent, facing immediate resistance between 55,400 and 55,500. On the institutional front, Foreign Institutional Investors turned net buyers on Monday, purchasing equities worth ₹821.80 crore, while Domestic Institutional Investors bought ₹3,856.90 crore worth of equities.
From a technical perspective, the Nifty’s close above 24,000 has put pressure on Call writers at the 24,000 and 24,200 strikes, potentially triggering short covering in early trade. Immediate support levels for Nifty are identified at 23,800 and 23,875, while resistance is observed at 24,200 and 24,400. Rajesh Palviya, Head of Research at Axis Direct, stated that as long as Nifty maintains its position above 24,000, it could advance towards the 24,150 to 24,350 range in the short term.
In a broader economic context, the European Commission has revised its 2026 Eurozone growth forecast downward to 0.9 percent from 1.2 percent and raised its inflation estimate to 3.0 percent, citing impacts from the Middle East conflict — a global headwind that markets are closely monitoring alongside ongoing diplomatic developments.
