Stock Market Outlook Today, 21 May 2026: Sensex, Nifty May Trade Range-Bound Amid Rupee Weakness, FII Selling

Indian stock markets are expected to open on a cautious yet resilient note on Thursday, May 21, 2026, as investors weigh improving technical signals against lingering macroeconomic concerns. Although benchmark indices staged a strong recovery from intraday lows in the previous session, persistent weakness in the Indian rupee, elevated crude oil prices and firm US bond yields are likely to keep traders selective and prevent an outright bullish breakout.

Stock Market Outlook Today, 21 May 2026: Sensex, Nifty Prediction for Thursday

Domestic equities bounced back sharply on Wednesday after an early sell-off, with the Nifty recovering nearly 250 points from the day's low and ending above the 23,650 mark. The rebound indicated that buyers continue to emerge around key support zones, even as global uncertainties and tightening financial conditions temper overall sentiment.

The BSE Sensex rose 117.54 points, or 0.16%, to close at 75,318.39, while the Nifty 50 gained 41 points, or 0.17%, to settle at 23,659.00. The recovery was aided by some cooling in crude oil prices, though the rupee remained under pressure and continued to weaken amid concerns over higher US Treasury yields and a stronger dollar.

Near-term market sentiment is likely to remain guarded due to a challenging macro backdrop.

"Markets are likely to remain cautious in the near term, amid an unfavourable macro backdrop marked by continued weakness in the rupee, elevated Brent crude prices near USD 111/bbl, and high US bond yields, all of which are tightening financial conditions and weighing on sentiment. FIIs turned net sellers after three consecutive buying sessions, while the rise in domestic G-Sec yields to six-week highs could delay the lending rate relief that markets were anticipating," said Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd.

Nifty Prediction Today, 21 May 2026: Check Technical Outlook by Experts

According to Bajaj Broking, the Nifty formed a bullish candlestick pattern on the daily chart, characterised by a lower high and lower low but a close near the day's peak. This suggests a strong pullback after a weak opening and reinforces the importance of support levels around 23,200-23,000.

The brokerage noted that this was the third rebound in the past six sessions from the same support region, highlighting sustained buying interest at lower levels.

"Going ahead, index to extend the last six sessions consolidation in the range of 23,200-23,900. Only a move above the recent breakdown area of 23,800-23,900, will signal a pause in the overall corrective trend. Index need to start forming higher high and higher low on a sustained basis in the daily chart and a move above the breakdown area of 23,800-23,900 to signal strength," said Bajaj Broking Research.

"Nifty has key support at 23,200-23,000 levels being the confluence of the lower band of the 8th April bullish gap area and the 61.8% retracement of the previous pullback (22,182-24,601)," the brokerage stated.

Bank Nifty Outlook for Thursday

Bank Nifty also witnessed a sharp intraday recovery and formed a bullish candle, indicating that the index continues to attract buying near critical support levels.

According to Bajaj Broking Research, the banking index is expected to consolidate within the 52,700-54,700 range in the near term. Sustaining above the 52,700-52,400 support zone could pave the way for a pullback toward 54,000 and 54,700.

"However, Index need to form higher high and higher low on a sustained basis in the daily chart and a move above the breakdown area of 54,400-54,700 to signal a pause in the recent downtrend. Key support is placed at 52,700-52,400 levels being the confluence of the lower band of the 8th April gap area and the 61.8% retracement of the previous pullback (49,955-57,456)."

Overall, technical indicators suggest that Indian equity markets may remain range-bound on Thursday, with 23,800-23,900 on the Nifty and 54,400-54,700 on Bank Nifty emerging as critical breakout zones. Until these resistance levels are decisively crossed, traders are likely to maintain a cautious approach despite evidence of strong buying support at lower levels.

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