Indian Markets Fade Early Gains: What Drove the Shift?

Indian equity markets experienced a mixed trading session on May 4, with major indices closing in positive territory but well below their intraday peaks. The Sensex concluded with a gain of 355.90 points (0.46%), reaching 77,269.40, and the Nifty added 121.75 points (0.51%) to close at 24,119.30. Early trading saw nearly a 1% surge, driven by broad sector buying. However, profit-booking emerged as the session progressed, tempering the initial enthusiasm. Stocks like Adani Ports, Reliance Industries, and Hindustan Unilever were among the gainers, while Bharti Airtel and Tata Consultancy Services saw pressure. Sectorally, metals, real estate, infrastructure, and pharmaceutical stocks performed well, gaining between 0.5% and 1%. Conversely, the information technology and media sectors faced headwinds. Broader markets, including mid-cap and small-cap indices, also registered gains of approximately 0.5%. Experts noted that investor sentiment was supported by positive election outcomes in West Bengal and strong Q4 earnings, outweighing Middle East concerns. However, uncertainty surrounding geopolitical events and oil price trends are key factors to watch. Technically, the Nifty's inability to sustain gains at higher levels was evident, with a similar upper wick pattern forming on the daily chart for the fourth time in seven sessions. The Indian rupee also weakened slightly, closing 16 paise lower against the US dollar at 95.08.