Domestic markets are likely to see a muted start on Thursday amid mixed global cues. According to analysts, consolidation phase is likely continue with short-term headwinds are slowing subsiding. Market remains closed on Friday due to Muharram.
According to Manish Gunwani, CIO – Equity, Bandhan AMC., the long-term equity market return is expected to converge to 6–6.5% above inflation, with current valuations considered fair rather than distressed. The small-cap space is considered the most interesting for a 3–5-year horizon, as it offers the best ability to play extreme change and access distressed valuations. “There is a cautious outlook on Indian IT services due to potential AI disruption and the fact that global IT competitors are currently trading at lower valuations.” It added.
Gift Nifty ruling at 24,100 signals flattish opening while Asian stocks are ruling sharply higher, led by Korea’s Kospi and Japan’s Nikkei.
Ajit Mishra – SVP, Research, Religare Broking Ltd, Given the current setup, consolidation in the index appears more likely in the near term. “Therefore, we continue to advocate a stock-specific approach, favouring relative outperformers and selective buying in rate-sensitive sectors such as banking, financials, realty, along with pharma.”
Meanwhile, PL Asset Management, the asset management arm of PL Capital Group has released its PMS Monthly Newsletter for May 2026, reporting that Indian markets successfully navigated one of the most challenging external environments in recent years.
May was defined by two contrasting global narratives. Global investors concentrated capital into AI and semiconductor-led markets in the US, South Korea and Taiwan — US hyperscalers committed ~$725 billion in 2026 AI capex, up 77% year-on-year — while India absorbed a series of external shocks: Brent crude spiking to $114 per barrel, the rupee hitting a record low of ₹96.97, and WPI inflation rising to a 3.5-year high of 8.3%. Crude moderated to $87.76 by end-May on ceasefire hopes, easing the immediate pressure.
Despite these headwinds, the Nifty Midcap 150 rose 2.60% and the Nifty Smallcap 250 advanced 1.56% even as the Nifty 50 declined 1.87%, reflecting continued domestic investor confidence.
From a derivatives perspective, the setup has turned constructive.
According to Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities, the PCR stands at 1.18, reflecting a positive undertone. Option chain data shows substantial Put Open Interest at 24,000 and 23,500 strikes, reinforcing these levels as key support zones. On the upside, significant Call Open Interest is visible at 24,500 and 25,000 strikes, which may act as immediate resistance levels, he said adding that fresh Put additions around the 24,000 strike suggest traders are building a support base near current levels.
Meanwhile, India VIX declined 4% to 13.39, indicating easing volatility and improving risk appetite.