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In a subdued trading session on Friday, May 16, benchmark indices struggled to find direction as bears attempted to push markets lower. However, bulls managed to keep the Nifty 50 above the key psychological level of 25,000. The 30-stock Sensex also moved in a narrow range throughout the day.

At the close, the Nifty 50 settled at 25,019.80, down 42.30 points or 0.17 per cent, while the Sensex ended 200.15 points lower at 82,330.59, a decline of 0.24 per cent.

Borader Market Update

Despite the flat performance of frontline indices, broader markets outperformed. The Nifty Midcap 100 index rose 1 per cent, while the Smallcap index jumped nearly 2 per cent, reflecting strong interest in mid- and small-cap counters.

Sectorial Update

Among sectoral indices, realty and media led the gains, each rising 1.6 per cent. On the flip side, IT and pharma stocks witnessed modest declines. Market volatility eased, with the India VIX falling 2.5 per cent to 16.48, indicating a slight drop in investor nervousness.

Defence sector stocks continued their winning streak for a sixth straight session. Cochin Shipyard, Mazagon Dock Shipbuilders, and Bharat Electronics Ltd (BEL) were among the top performers, buoyed by renewed government focus on indigenous defence manufacturing. The Nifty India Defence index hit a fresh 52-week high and has surged 20 per cent since May 9.

Meanwhile, global investors are regaining confidence in Indian equities. Foreign funds are returning in force, backing billion-dollar corporate deals and pushing stock prices close to seven-month highs. India is increasingly viewed as a potential beneficiary of global supply chain shifts amid the ongoing US-China trade tensions.

According to a recent BofA Securities survey, global fund managers, including Franklin Templeton and Federated Hermes, have turned bullish on Indian markets, placing India as their top investment destination in Asia.

After withdrawing over $25 billion from Indian equities between October and February, foreign investors have pumped in more than $2.5 billion this quarter alone, brushing aside concerns around trade tensions and geopolitical issues. The Nifty, which had dropped to multi-month lows in early April, now trades within 5 per cent of its September peak.