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Domestic indices remain under pressure in late morning deals
May-22-2025

Domestic equity indices remained under pressure and were trading lower with cut of over 0.85 percent in late morning deals on account of selling by funds and retail investors. Weak cues from global markets weighed on the domestic sentiments. Traders were cautious as the 30-year Treasury bond yield in US was up about 12 basis points to 5.09%, breaking above the key 5% level for the second time this week and reaching a level not seen since October 2023.  Further, depreciation in Indian rupee against dollar also weighed down sentiments. Rupee weakened by 8 paise to 85.67 against the dollar at the Inter-bank Foreign Exchange market on account of increased demand for the American currency from importers and banks. 

On the global front, Asian markets were trading mostly in red, tracking declines on US markets overnight as investors’ sentiment soured on fears that a new U.S. budget bill could substantially add to the country’s debt. Back home, most of the sectoral indices on the BSE were trading in red led by Auto down, FMCG, Energy, IT and Consumer Durables. 

The BSE Sensex is currently trading at 80863.53, down by 733.10 points or 0.90% after trading in a range of 80727.11 and 81323.24. There were 2 stocks advancing against 28 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.39%, while Small cap index up by 0.07%.

The only gaining sectoral index on the BSE was Telecom up by 0.13%, while Auto down by 1.26%, FMCG down by 1.18%, Energy down by 0.99%, IT down by 0.93% and Consumer Durables down by 0.87% were the top losing indices on BSE.

The only gainers on the Sensex were Tata Steel up by 0.93% and Bharti Airtel up by 0.59%. On the flip side, Power Grid down by 2.23%, Mahindra & Mahindra down by 2.03%, ITC down by 1.79%, Tata Motors down by 1.56% and Reliance Industries down by 1.54% were the top losers.

Meanwhile, the Reserve Bank’s latest bulletin has said that amid global trade realignments and industrial policy shifts, India is increasingly positioned to function as a ‘connector country’ that can become a key intermediary in sectors such as technology, digital services and pharmaceuticals. It noted that the recent completion of free trade agreement with UK points to a strengthening of bilateral trade linkages. It added that going forward, notwithstanding the daunting challenges in the horizon, India stands well-positioned to navigate the ongoing global headwinds with confidence, ready to harness emerging opportunities and consolidate its role as a key driver of global growth. It further said that persistent trade frictions, heightened policy uncertainty, and weak consumer sentiment continue to create headwinds for global growth.

The bulletin emphasizing the resilience of the economy, has noted that various high frequency indicators of industrial and services sectors sustained their momentum in April. Meanwhile, it has indicated that a bumper rabi harvest and higher acreage for summer crops, coupled with favourable southwest monsoon forecasts for 2025, augur well for the agriculture sector. Besides, as the headline CPI inflation fell for the sixth consecutive month to its lowest since July 2019, primarily driven by the sustained easing in food prices, the bulletin noted that inflation pressure has eased significantly and is poised for a durable alignment with the target in 2025-26.

It highlighted that commercial banks’ (SCBs’) deposit growth decelerated from 10.6 per cent as on March 21, 2025 to 10.3 per cent as on May 2, 2025, with the base and momentum effect offsetting each other. It added that in the fiscal year 2024-25 SCBs were primarily relied on deposits for funding, while their reliance on borrowings had declined. Meanwhile, in response to the 50-bps cut in the policy repo rate since February 2025, most of the banks have reduced their repo-linked external benchmark-based lending rates (EBLRs) and marginal cost of funds-based lending rate (MCLR). The central bank said views expressed in the article are those of the authors and do not represent the views of the Reserve Bank of India.

The CNX Nifty is currently trading at 24595.50, down by 217.95 points or 0.88% after trading in a range of 24541.60 and 24737.50. There were 5 stocks advancing against 45 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 0.74%, Bharti Airtel up by 0.59%, Indusind Bank up by 0.47%, JIO Financial up by 0.42% and Dr. Reddy's Lab up by 0.16%. On the flip side, Power Grid down by 2.31%, Mahindra & Mahindra down by 2.13%, Bajaj Auto down by 1.86%, ITC down by 1.77% and Tech Mahindra down by 1.69% were the top losers.

Asian markets were trading mostly in red; Hang Seng declined 187.05 points or 0.79% to 23,640.73, Shanghai Composite weakened 3.18 points or 0.09% to 3,384.39, Straits Times fell 16.38 points or 0.42% to 3,866.17, KOSPI dropped 30.82 points or 1.17% to 2,594.76, Nikkei 225 slipped 275.52 points or 0.74% to 37,023.46 and Taiwan Weighted lost 133.48 points or 0.62% to 21,670.43. However, Jakarta Composite gained 31.14 points or 0.43% to 7,173.60.
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