Sensex, Nifty outlook for Monday, May 4: What to expect from stock market? Key levels, strategy & more

Sensex, Nifty: Domestic equity benchmarks ended the holiday-shortened week on a positive note with BSE Sensex and NSE Nifty edging up 0.32% and 0.41%, respectively. On Thursday, the 30-pack index closed at 76,913.50, and the 50-pack index settled at 23,997.55. 

Both declined about 0.7% in the last session to end in the red. Nifty futures on the NSE International Exchange were up 82.5 points, or 0.34%, to trade at 24,229.5, hinting at positive opening on Monday, May 4. 

Geopolitics, State elections, earnings, and flow 

On the home front, the immediate catalyst would be the outcome of key state elections, with investors watching to see if the Centre's ruling party, BJP, can capture West Bengal and make inroads into Kerala and Tamil Nadu, said Hariprasad K, SEBI-registered research analyst and founder, Livelong Wealth.

“Persistent FII outflows, mixed earnings trends, and currency weakness continued to weigh on sentiment,” said Ajit Mishra – SVP, Research, Religare Broking Ltd.

“Additionally, India’s FY26 trade deficit widened on an annual basis, although the March deficit narrowed to $20.67 billion, offering partial relief,” Mishra said, adding “on the domestic front, the Q4 FY26 earnings season will gather pace, with several key companies across sectors scheduled to report results.”

Globally, the prolonged disruptions over the Strait of Hormuz continue to inject volatility into the markets, with Brent crude continuing to surge and the UAE’s exit from OPEC and escalating US-Iran tensions, analysts say.

“Foreign institutional investors (FIIs) remained net sellers throughout the week, extending the selling trend seen in recent months. Cumulative FII outflows for April have crossed Rs 70,100 crore,” said Ponmudi R, CEO - Enrich Money.

Key levels to watch

Nifty: Outlining the index's behaviour, Mishra noted, "From a technical standpoint, the 24,000 level continues to act as a magnetic zone, with price consolidating around this region in line with options data."  Analysts widely agree that the index is operating within a range of 23,800 to 24,300. “On the upside, the 24,400–24,800 zone is expected to act as a strong resistance band,” Mishra noted

Sensex: “Sensex is currently trading within the 76,900–77,200 range, reflecting a range-bound movement with a cautious undertone amid ongoing market volatility,”  Ponmudi said. He placed immediate resistance for the 30-share pack in the 77,500–78,000 band, while the 76,300–76,000 range is expected to serve as immediate support.  
Strategy

Mishra advised, "With global uncertainties persisting and domestic cues remaining mixed, investors should maintain a cautious and selective approach."  

“Pharma and healthcare appear promising after an extended corrective phase. Additionally, metals and energy remain on the radar, along with themes such as capital markets and select CPSE stocks,” Mishra added.

While, Ponmudi suggested, "Traders should remain agile, avoid aggressive leverage, and adhere to disciplined risk management practices."