The Indian stock market extended its upward momentum on Monday, 5 May 2025. Benchmark indices, the Sensex and Nifty 50, closed at their highest levels for the year, continuing a strong run seen over the past few weeks.
This positive market trend was primarily driven by sustained buying interest from foreign institutional investors (FIIs) and a significant drop in global crude oil prices, which eased macroeconomic concerns. However, the day wasn't uniformly bullish. Gains were somewhat tempered by underlying caution stemming from ongoing geopolitical tensions and notable weakness in banking stocks following the release of key quarterly earnings reports.
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This market update delves into the key activities of the day, exploring the performance of indices, the driving factors behind the rally, sectoral movements, and major stock-specific news shaping the share market landscape.
Key Market Highlights: 5 May 2025
Here's a quick summary of the major stock market news today:
- Indices Reach New Peaks: The BSE Sensex surged nearly 295 points, while the NSE Nifty 50 gained over 114 points. Both indices marked their highest closing levels in 2025.
- FIIs Remain Net Buyers: Foreign investors continued their recent trend of robust buying, injecting significant capital into Indian equities and providing crucial support to the market rally.
- Crude Oil Tumbles: International Brent crude oil prices experienced a sharp correction, falling below the significant $60 per barrel mark, offering relief on the inflation and trade balance fronts.
- Adani Stocks Lead Gains: Shares of Adani Group companies, especially Adani Enterprises and Adani Ports, featured prominently among the top Nifty gainers.
- Banking Sector Under Pressure: Key banking stocks, notably Kotak Mahindra Bank and State Bank of India (SBI), faced significant selling pressure following their quarterly results announcements, acting as a drag on overall market gains.
- Broader Market Strength: Indices representing midcap and smallcap stocks outperformed the main benchmarks, indicating healthy market breadth and wider participation in the rally.
Indian Market Today: Indices Scale New 2025 Peaks
The positive momentum was evident in the closing figures of the headline indices.
The 30-share BSE Sensex climbed 294.85 points, or 0.37%, to settle at 80,796.84. During the trading session, it displayed strong buying interest, hitting an intraday high of 81,049.03 before paring some gains. This closing value represents the highest point the Sensex has reached so far in 2025.
Similarly, the NSE Nifty 50 index advanced 114.45 points, or 0.47%, closing the session at 24,461.15, also its highest closing level this year. The index navigated a range between an intraday low of 24,400.65 and a high of 24,526.40.
This marked the second consecutive day of gains for the benchmarks and extended a broader positive trend. The market has now seen gains in 12 out of the last 16 trading sessions, during which both Sensex and Nifty have surged by over 10%. The benchmark indices closing at their highest levels for 2025 signals strong bullish momentum, indicating sustained buying pressure has overcome previous selling interest. This psychological milestone can potentially attract further investment, suggesting underlying strength despite some analysts advising caution.
However, the intraday movement, particularly the Nifty touching levels above 24,500 but failing to close above it, hints at potential resistance near these higher levels. While the overall trend remains positive, this pattern suggests that further immediate gains might face hurdles, requiring fresh triggers to push decisively higher.
Why Did the Stock Market Rise Today? Key Drivers Explained
Several factors contributed to the positive stock market today:
- Robust Foreign Institutional Buying: The most significant driver was the continued and substantial inflow of funds from FII inflows. Reversing their heavy selling stance from earlier in the year (which saw outflows of nearly ₹1.29 lakh crore in the first three months of 2025), FIIs have become aggressive buyers.
Over the last 11 trading sessions alone, they have net purchased Indian equities worth over ₹38,300 crore. Data from Friday, May 2nd, confirmed this trend, with FIIs being net buyers to the tune of ₹2,769.81 crore, setting a positive stage for Monday's session. This reversal signifies renewed foreign investor confidence in the Indian market's prospects relative to other emerging economies.
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- Sharp Correction in Crude Oil Prices: Global crude oil price benchmarks significantly declined. According to different reports, Brent crude futures fell sharply, trading below the $60 per barrel level (around $59.25-$60.40). For India, a major importer of crude oil, lower prices are a significant positive. They help reduce the import bill, ease concerns about the current account deficit, mitigate inflationary pressures, and potentially lower input costs for various industries, thereby improving the overall macroeconomic outlook.
- Supportive Global Cues & Weaker Dollar: The positive closing of US markets on Friday provided a favourable backdrop for Asian trading. Furthermore, a weakening US dollar globally tends to encourage capital flows into emerging markets like India, making Indian assets relatively more attractive to foreign investors. Asian markets showed mixed trends, with several major centres like Japan, China, and Hong Kong closed for public holidays.
- Strong Domestic Economic Indicators: India's macroeconomic picture received a boost from record Goods and Services Tax (GST) collections reported for April 2025. At ₹2.37 lakh crore, collections were up 12.6% year-on-year, indicating robust economic activity, healthy consumption patterns, and improved tax compliance.
- Geopolitical and Trade Factors: While investor sentiment remains somewhat cautious due to ongoing geopolitical tensions between India and Pakistan and uncertainties surrounding global trade tariffs, the market appeared to prioritise the positive flow and macro factors on Monday. Some reports also cited optimism around potential progress in US-India trade negotiations.
The combination of persistent FII buying and falling oil prices appears to be creating a powerful positive feedback mechanism for the Indian stock market. Foreign investors are likely encouraged by the improving macroeconomic picture resulting from lower oil prices, and their continued buying provides liquidity that further boosts market sentiment. This dynamic seems strong enough to overcome lingering global and geopolitical risks, at least in the immediate term.
Interestingly, the current market rally seems increasingly reliant on these external factors – FII flows, global oil prices, and dollar weakness – rather than being solely driven by domestic corporate earnings strength. Several analysts have pointed out that the Q4 earnings season has been somewhat sluggish overall, and results from key banks like SBI and Kotak Mahindra Bank disappointed the street. This suggests the market's upward momentum is heavily dependent on the continuation of favourable global conditions and sustained foreign investment.
Sectoral Spotlight: Broad Gains Led by Auto, Oil & Gas; Banks Lag
The sectoral performance today reflected broad-based buying interest across the market, with most indices closing in positive territory.
Leading the gains were sectors like BSE Services (up 2.99%), Oil & Gas (up 1.95%), Auto (up 1.88%), Consumer Discretionary (up 1.58%), Utilities (up 1.50%), and Energy (up 1.49%). The Nifty Auto index saw particular strength, potentially buoyed by expectations of lower fuel prices and specific company news like M&M gaining market share. The Nifty IT index also registered gains.
The notable exception was the banking stocks sector. Both the Nifty Bank and BSE Bankex indices finished the day in the red. The underperformance was primarily driven by negative reactions to the Q4 financial results reported by major private and public sector banks, including Kotak Mahindra Bank and SBI.
Despite the weakness in banks, the overall market health appeared robust, as indicated by the strong performance of the broader markets. The BSE Midcap index jumped 1.45%, and the BSE Smallcap index climbed 1.23%, both outperforming the headline Sensex and Nifty. This outperformance suggests that investor risk appetite is improving and extending beyond the large-cap index constituents. Such broad participation often points towards growing confidence in the domestic economy's underlying strength.
The specific underperformance of the banking sector, even amidst strong FII inflows (which often favour large banks), underscores the market's current focus on earnings delivery and company-specific fundamentals, particularly during the ongoing results season. It highlights that even strong liquidity flows may not be sufficient to counteract negative company-specific news.
Nifty 50 Movers: Adani Stocks Surge, Kotak Bank Drags
Within the Nifty 50 index, specific stocks saw significant moves based on news and sentiment:
Top Nifty Gainers:
- Adani Enterprises (ADANIENT): Surged 6.96%. The rally in Adani Group stocks was reportedly fueled by news that representatives met with US administration officials regarding the potential dismissal of certain charges.
- Adani Ports (ADANIPORTS): Gained strongly, up 6.31%.
- Trent (TRENT): Rose 4.32%.
- Shriram Finance (SHRIRAMFIN): Climbed 4.17%.
- Bajaj Finserv (BAJAJFINSV): Increased by 3.73%.
Top Nifty Losers:
- Kotak Mahindra Bank (KOTAKBANK): Tanked 4.59%. The sharp fall followed the bank's Q4 results, which showed a decline in consolidated net profit primarily due to higher provisions for stress in its microfinance portfolio.
- JSW Steel (JSWSTEEL): Fell 1.76%.
- Oil and Natural Gas Corporation (ONGC): Declined 1.73%. The fall was linked to the sharp drop in global crude oil prices, which directly impacts the company's revenue.
- State Bank of India (SBIN): Dropped 1.25%. SBI reported a year-on-year decline in its Q4 net profit, attributed to higher provisions and the absence of a one-time gain seen in the previous year.
- Dr Reddy's Laboratories (DRREDDY): Eased by 0.88%.
The significant divergence between the top gainers and losers within the Nifty 50 clearly illustrates how specific news flow, such as reports concerning Adani Group or earnings announcements from major banks, is heavily influencing individual stock performance. This reinforces the notion that the market is currently operating on a stock-specific basis rather than exhibiting a uniform trend across all large-cap names.
Stocks in the News: Beyond the Benchmarks
Several other companies made headlines today:
- BMW Industries: The stock was sharply in focus, jumping 15.32% after the company announced securing a substantial work order worth ₹1,764 crore from Tata Steel for processing and conversion of coils.
- Maruti Suzuki: India's largest carmaker saw its market share dip below 40% in April's sales figures. Mahindra & Mahindra (M&M) gained share, rising to the second position, while Hyundai slipped to fourth.
- Vinyl Chemicals: Shares rose 5.82% following the announcement of its Q4 profit figures and the declaration of a final dividend of ₹7 per share.
- Bajaj Consumer Care: Reported a decline in Q4 net profit compared to the previous year; its shares traded flat.
- Epigral: Shares gained 3.31% after the company reported an increase in Q4 net profit year-on-year and declared a final dividend.
- Nuvoco Vistas: Announced plans to establish a new 2 million tonnes per annum (MTPA) grinding unit in Kutch, Gujarat.
- Capri Global Capital: The stock jumped 4% after the company reported its Q4 financial results.
- Paytm (One 97 Communications): Ahead of its results declaration tomorrow, analysts expressed mixed expectations, with estimates ranging from a small loss to a marginal profit, despite an anticipated year-on-year decline in revenue.
- Earnings Calendar: Several other companies, including M&M, Coforge, Indian Hotels Company, and CAMS, were scheduled to announce their quarterly results today.
These examples, particularly the significant rally in BMW Industries following its order win, demonstrate how positive corporate announcements and operational developments can act as powerful catalysts for individual stock performance, especially outside the large-cap space.
Broader Market View: Positive Sentiment Prevails
The overall market sentiment remained positive, as reflected in the market breadth.
On the BSE, as of 3 pm, 2,523 stocks advanced while 1,439 declined, and 191 remained unchanged. This positive advance-decline ratio confirms that the day's rally wasn't solely reliant on a few large-cap heavyweight gainers, lending more credibility to the upward move. It aligns with the outperformance seen in the midcap stocks and smallcap stocks indices.
Activity in specific stocks remained high. 68 stocks on the BSE hit new 52-week highs, while 60 touched 52-week lows. Additionally, 240 stocks were locked in their upper circuit limits, while 246 hit their lower circuits, indicating pockets of high volatility and strong directional moves in individual counters.
Commodities & Currency Check
- Crude Oil: As mentioned, Brent crude saw a significant drop, trading below $60 per barrel, providing a boost to market sentiment.
- Gold & Silver: Precious metals saw some volatility. While some earlier reports indicated declines, the closing data showed gains. Gold futures (MCX) closed higher by ₹1,598 at ₹94,235 per 10 grams, and Silver closed up ₹811 at ₹94,100 per kg.
- USD/INR: The US dollar index weakened against other major currencies. Consequently, the Indian Rupee likely benefited from the strong FII inflows and lower oil prices, potentially appreciating against the dollar.
The clear takeaway from the commodity space was the sharp fall in oil prices, a distinct positive for the Indian economy.
Market Sentiment & Outlook: Cautious Optimism
While the market sustained its positive momentum to reach new highs for the year, analysts noted a slight decrease in the overall level of optimism. Market action is becoming increasingly selective, focusing more on stock and sector-specific trends driven by quarterly results rather than broad-based movements.
Sentiment continues to be supported by the strong FII inflows and favourable macro factors like lower oil prices and a stable Rupee. However, caution persists due to the lingering geopolitical risks and global trade uncertainties.
From a technical perspective, the Nifty technical levels show immediate resistance near the 24,500 mark. Analysts suggest that a sustained move above this level could potentially propel the index towards 24,630. On the downside, immediate support is anticipated around the 24,360 level. The Put-Call Ratio (PCR) stood at 0.82, indicating a slightly cautious undertone among options traders in the near term.
Looking ahead, market participants will continue to closely monitor the ongoing Q4 earnings season, FII/DII investment patterns, and developments on the global economic and geopolitical fronts. Analysts generally advise a cautious approach, suggesting potential consolidation and recommending a focus on stock-specific opportunities emerging from corporate results.
The market appears to be at an interesting juncture. While the upward momentum driven by strong liquidity flows is undeniable, the presence of technical resistance, underlying geopolitical concerns, and mixed earnings reports suggest that the path ahead might involve consolidation or a more selective rally, heavily dependent on continued FII support and stable global cues.
Conclusion: Market Hits 2025 Highs, But Caution Lingers
In summary, 5 May marked a positive day for the Indian stock market, with benchmark indices achieving new closing highs for 2025. The rally was convincingly fueled by robust foreign fund inflows and the welcome relief of falling crude oil prices.
However, the headline gains masked underlying nuances. Weakness in the crucial banking sector following disappointing earnings from major players, coupled with persistent geopolitical concerns, introduced a note of caution. The market's increasing reliance on FII flows also makes it sensitive to shifts in global sentiment.
As the earnings season progresses, investors will keenly watch corporate performance and global cues to gauge whether the current momentum can be sustained or if a period of consolidation is likely.