Sensex Ends Green After Volatile Trade; Metals Shine, IT Lags

Indian benchmark indices ended marginally higher on Wednesday, snapping a recent losing streak as value buying in metal and broader market stocks helped markets recover from early weakness, although continued pressure in IT and banking shares capped gains.

The BSE Sensex gained 49.74 points or 0.07% to settle at 74,608.98, while the NSE Nifty50 rose 33.05 points or 0.14% to close at 23,412.60.

Markets witnessed volatility through the session, with benchmark indices recovering from lower levels after recent sharp declines. Broader markets outperformed frontline indices, reflecting selective buying in beaten-down midcap and smallcap counters.

The Nifty Midcap100 index gained 0.77%, while the Smallcap100 index rose 0.31%. Market breadth also remained firmly positive, with advances outnumbering declines across the broader market.

Asian Paints emerged as the top Nifty gainer, rising 4.47%. Adani Enterprises, Tata Steel, Hindalco, Adani Ports and Bharat Electronics were also among the major gainers.

On the downside, Eicher Motors declined over 2%, while M&M, Infosys, Tata Consumer Products, Bajaj Auto and Tech Mahindra ended lower.

Metal Stocks Lead Market Recovery

Metal shares emerged as the biggest support for the market recovery, with the Nifty Metal index surging 3.18%.

Analysts attributed the rally to supply-side concerns and short covering after the recent sharp correction in commodity-linked counters. Oil & gas, infrastructure and consumer durable stocks also ended firmly higher.

Vinod Nair, Head of Research at Geojit Investments, said metal stocks outperformed due to supply squeeze concerns, while broader markets witnessed dip buying and short covering activity after recent heavy losses.

Nair added that inflation remained below expectations domestically, offering near-term comfort, although prolonged geopolitical tensions and elevated commodity prices could still limit the Reserve Bank of India’s policy flexibility going forward.

The broader market recovery also reflected improving confidence among domestic investors following relatively stable corporate earnings in the previous quarter.

Rubina Singla, Founder of Equitrust Solutions, said valuations in midcap and smallcap segments have turned attractive after the recent correction, helping domestic investors selectively return to the market.

IT, Banking Stocks Continue To Lag

Despite the recovery in broader markets, IT and banking stocks remained under pressure.

The Nifty IT index declined 1.13%, extending recent weakness amid concerns around slowing global technology spending and rising competition from AI-led business models.

Infosys and Tech Mahindra were among the major laggards within the sector, while analysts continued to flag concerns over capital outflows from India as global investors increasingly shift towards AI-driven opportunities in developed markets.

Rubina Singla said India's traditional IT services model is facing pressure as investor flows increasingly move towards countries and companies leading artificial intelligence innovation.

Banking shares also underperformed during the session. The Nifty Bank index ended marginally lower, falling nearly 100 points to close at 53,454.40.

The banking index had initially surged to an intraday high of 54,103.90 before witnessing heavy selling in the second half of the session. Federal Bank also erased gains and fell over 2% from the day’s high.

India VIX rose 0.73% to 19.42, indicating that traders continue to remain cautious despite the market’s recovery from recent lows.

MSCI Rejig Boosts Select Financial Stocks

In a separate development, global index provider MSCI announced the addition of four Indian stocks to its Global Standard Index as part of its latest rejig effective May 29.

The four additions include Federal Bank, MCX, Nalco and Indian Bank.

According to Nuvama Institutional Equities, the inclusion of these companies could result in cumulative inflows of nearly $1.38 billion into the stocks.

Analysts said MSCI-related inflows could continue to support selective buying interest in these counters over the coming sessions despite broader market volatility.

Technical Indicators Still Signal Weakness

Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities, said the Nifty witnessed strong buying interest at lower levels after drifting lower in the opening trade, helping the index recover part of its recent losses.

However, he cautioned that technical indicators continue to remain weak despite the recovery.

According to Shah, the RSI showed a mild uptick from the 40 zone, indicating only a temporary pause in bearish momentum, while the MACD remains below the zero line with rising red histogram bars, suggesting sellers still retain control over the broader trend.

He added that the Midcap index managed to reclaim its 20-day EMA after briefly slipping below it in the previous session, helping maintain its short-term bullish structure. The Smallcap index also recovered, although gains remained relatively moderate after Tuesday’s sharp correction.

Shah noted that market breadth remained firmly positive, with 291 stocks from the Nifty 500 universe ending the session in the green, indicating continued selective buying interest in the broader market despite ongoing macroeconomic and geopolitical concerns.