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EQUITY
Key gauges end lower due to weak global cues
May-22-2025

Indian equity benchmarks experienced a substantial decline on Thursday and settled with losses of more than half percent, due to selling in Energy, FMCG and Oil & Gas shares amid a global equity rout triggered by surging bond yields and US debt concerns. Besides, elevated crude oil prices further dented investor sentiments. 

Some of the important factors in today’s trade:

Rupee falls against dollar: Indian Rupee depreciated against the US dollar, on dollar demand from importers and foreign banks as well as surge in crude oil prices. Moreover, the narrowing yield differential between India and the US, is making Indian assets less attractive.  

India seeking full exemption from additional 26% tariff in interim trade agreement with US: India and the US are likely to announce an interim trade agreement before July 8, with the country seeking full exemption from the additional 26 per cent tariff on domestic goods. 

Rainfall to boost crop production: Agriculture Secretary Devesh Chaturvedi said the recent rainfall following extreme heat conditions across parts of the country has not caused any damage to major crops and is expected to boost summer crop production prospects. 

FPIs turn net buyers: Foreign portfolio investors (FPIs) turned net buyers of Indian equities after two days of selling on Wednesday as they mopped up stocks worth Rs 2,201.79 crore, according to the provisional data from the National Stock Exchange. 

Weak global cues: European markets were trading lower as investors reacted to a U.S. Treasury sell-off, mixed regional data and some disappointing earnings. Asian markets settled mostly down on Thursday after longer-dated U.S. Treasury yields hit their highest in 18 months on concerns that a new budget proposal could swell the country's federal deficit. 

Finally, the BSE Sensex fell 644.64 points or 0.79% to 80,951.99 and the CNX Nifty was down by 203.75 points or 0.82% to 24,609.70.    

The BSE Sensex touched high and low of 81,323.24 and 80,489.92 respectively. There were 3 stocks advancing against 27 stocks declining on the index. 

The broader indices ended mixed; the BSE Mid cap index fell 0.33%, while Small cap index was up by 0.17%.

The lone gaining sectoral index on the BSE was Telecom up by 0.31%, while Energy down by 1.25%, FMCG down by 1.25%, Oil & Gas down by 1.13%, IT down by 1.09% and Consumer Durables down by 1.07% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 1.82%, Bharti Airtel up by 0.44% and Ultratech Cement up by 0.10%. On the flip side, Mahindra & Mahindra down by 2.59%, Bajaj Finserv down by 1.80%, Tech Mahindra down by 1.77%, Power Grid Corporation down by 1.74% and ITC down by 1.58% were the top losers.

Meanwhile, the HSBC Flash India PMI report has showed that private sector growth in India moved up a gear during May, boosted by acceleration in the service economy. There was also an improvement in business confidence for the first time since January. The HSBC Flash India Composite Output Index -- a seasonally adjusted index that measures the month-on-month change in the combined output of India's manufacturing and service sectors -- surged to 61.2 in May from a final reading of 59.7 in April. The HSBC Flash India Manufacturing PMI index also rose to 58.3 in May from 58.2 in April.

As per the report, goods producers indicated the slowest increase in output for three months during May, while service providers reported the fastest rise since March 2024. At the composite level, the latest upturn was the quickest in just over a year. The report further showcased reduced pressure on the operating capacities of Indian private sector companies, as outstanding business volumes rose at the slowest pace since September 2024. Service providers noted the weakest increase in backlogs for eight months and goods producers signaled no change since April.

On the inflation front, across the private sector, the rate of input cost inflation hit a five-month high and broadly converged to its long-run average. The acceleration was widespread across the manufacturing and service economies. Prices charged for Indian goods and services rose at a quicker rate in May, with the aggregate rate of inflation at a six-month high. Notably, manufacturing firms revealed the steepest increase in over 11-and-a-half years. Demand strength facilitated the pass-through of rising expenses to clients.

The CNX Nifty traded in a range of 24,737.50 and 24,462.40. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 1.76%, JSW Steel up by 0.71%, Bajaj Auto up by 0.65%, Bharti Airtel up by 0.47% and Hero MotoCorp up by 0.19%. On the flip side, ONGC down by 2.65%, Mahindra & Mahindra down by 2.42%, Hindalco down by 2.03%, Wipro down by 1.94% and Trent down by 1.79% were the top losers. 

European markets were trading lower; UK’s FTSE 100 decreased 51.37 points or 0.59% to 8,735.09, France’s CAC fell 73.78 points or 0.94% to 7,836.71 and Germany’s DAX lost 196.57 points or 0.82% to 23,925.83.

Asian markets settled mostly down on Thursday tracking Wall Streets’ overnight fall after US Treasury yields hit their highest in 18 months on concerns that a new budget proposal could swell the country's federal deficit. US President Donald Trump is championing an extension of his 2017 tax cuts, which analysts warn could add trillions to the federal government's already massive $36.2 trillion debt pile. The plan has sparked fears of an even wider deficit, especially as interest payments continue to soar. Former US Treasury Secretary Steven Mnuchin said he is more alarmed by the country’s growing budget deficit than the trade deficit, and urged Washington to prioritize fiscal repair. Japanese shares fell as the yen hit a new two-week high against the US dollar, despite data showing Japan's core machinery orders rose 13% in March from the previous month. Seoul shares declined after reports suggested that the United States had demanded Seoul to come up with strong measures to boost the won.

Asian Indices

Last Trade            

Change in Points

Change in %      

Shanghai Composite

3,380.19

-7.38

-0.22

Hang Seng

23,544.31

-283.47

-1.20

Jakarta Composite

7,166.98

24.52

0.34

KLSE Composite

1,527.02

-17.78

-1.15

Nikkei 225

36,985.87

-313.11

-0.85

Straits Times

3,880.09

-2.46

-0.06

KOSPI Composite

2,593.67

-31.91

-1.23

Taiwan Weighted

21,670.96

-132.95

-0.61
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