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Markets end flat with negative bias amid trade tensions
Jun-02-2025

Indian equity benchmarks ended flat with negative bias on Monday amid concerns over US President Donald Trump's fresh tariffs on steel imports. Markets made gap-down opening and remained sluggish amid heightened geopolitical tensions after Ukraine launched a major drone strike on Sunday, destroying 40 key Russian aircraft. In afternoon session, benchmarks pared most of their losses but failed to end in positive territory. Buying in stocks such as Adani Ports, M&M and Power Grid, helped markets to pare losses.

Some of the important factors in today’s trade:

Doubling tariff on steel, aluminium by US to impact Indian exporters: The Global Trade Research Initiative (GTRI) has said that US President Donald Trump's announcement to double tariffs on imported steel and aluminium will impact Indian exporters, as it would hurt their profitability. On May 30, Trump announced that he would double the existing 25 per cent tariffs on steel and aluminium imports from June 4.

India’s manufacturing activity slows down slightly in May: India’s manufacturing activity slowed down slightly in the month of May 2025 with HSBC India Manufacturing Purchasing Managers' Index (PMI) falling to three-month low of 57.6 from 58.2 in April 2025 amid softer growth of new orders and production. 

Gross GST collections grow 16.4 per cent to over Rs 2.01 trillion in May: The Gross GST collections has grown 16.4 per cent in May to over Rs 2.01 trillion as compare to Rs 1.72 trillion in May 2024. It has remained above the Rs 2 trillion mark for the second month in a row.

India, US desire to give preferential access to each other's businesses: Commerce Minister Piyush Goyal said India and the US desire to give preferential market access to each other's businesses and teams of both the countries are working together on the proposed bilateral trade agreement.

Global front: European markets were trading mostly lower amid reports that the HCOB Germany Manufacturing PMI was revised down to 48.3 in May 2025, from a preliminary estimate of 48.8 and April's 48.4. Asian markets ended mostly lower as trade tensions returned to the fore as Beijing accused U.S. of violating Geneva trade truce over chip curbs and the Trump administration announced it will double the current tariff rate on steel and aluminum imports from 25 percent to 50 percent.

Finally, the BSE Sensex fell 77.26 points or 0.09% to 81,373.75 and the CNX Nifty was down by 34.10 points or 0.14% to 24,716.60.

The BSE Sensex touched high and low of 81,474.26 and 80,654.26 respectively. There were 13 stocks advancing against 17 stocks declining on the index. 

The broader indices ended in green; the BSE Mid cap index rose 0.58%, while Small cap index was up by 0.36%.

The top gaining sectoral indices on the BSE were Realty up by 2.38%, FMCG up by 0.65%, Utilities up by 0.57%, PSU up by 0.53% and Power was up by 0.35%, while Metal down by 0.58%, IT down by 0.57%, TECK down by 0.45%, Consumer Durables down by 0.40% and Basic Materials was down by 0.18% were the top losing indices on BSE.

The top gainers on the Sensex were Adani Ports up by 2.51%, Mahindra & Mahindra up by 1.58%, Power Grid up by 1.07%, Eternal up by 1.07% and Hindustan Unilever up by 1.00%. On the flip side, Tech Mahindra down by 1.47%, Tata Steel down by 1.21%, Tata Motors down by 1.12%, Titan Company down by 0.80% and HDFC Bank down by 0.60% were the top losers.

Meanwhile, with support of growth in manufacturing, services and farm sectors, Finance Minister Nirmala Sitharaman has said India is sustaining its Gross Domestic Product (GDP) growth momentum as the fastest-growing economy for the fourth year in a row. She said India’s manufacturing activity has been ‘good’ during the January-March period, which has helped clock a GDP growth of 7.4 per cent during the quarter and 6.5 per cent for the full 2024-25 fiscal. She noted that ‘India is sustaining the growth and it is the fastest growing economy now for the fourth year continuously thanks to the work of small, medium, and large industries; industries which are coming in and making sure our manufacturing capacity, our service capacity are all intact. Agriculture has also sustained us even during Covid and subsequently’.

The 6.5 per cent GDP growth for FY’25 comes on a high base of FY’24 when the economy grew at 9.2 per cent. The 7.4 per cent growth in the March quarter was also on a high base of 8.4 per cent in FY’24. She said during the January-March quarter there were views that industry was not investing enough, capacities were not increasing and questioned its impact on the economy. She added ‘I’m glad, India’s industry.. the manufacturing activity has all been good during Q4 of 2024-25 and there was a real GDP growth of 7.4 per cent in Q4 alone. As a result, for the entire financial year of 2024-25 (April-March), the real GDP growth was 6.5 per cent’.

Sitharaman said every year the Government is working to remove regulatory difficulties and bring in soft-touch regulation, which will allow people to do business without suspicion. She said she is open to receiving suggestions for removing hurdles to business in easing regulatory hurdles. She said ‘We are at that part of India’s history where it just requires all of us to have confidence in our country’s abilities and belief that we can definitely deliver that goal.. how long more are we going to say we are a developing country’. She said in achieving the goal of becoming a developed nation by 2047, the country needs to come out of the evil of petty corruption.

The CNX Nifty traded in a range of 24526.15 and 24754.40. There were 20 stocks advancing against 30 stocks declining on the index.   

The top gainers on Nifty were Adani Ports & SEZ up by 2.46%, Mahindra & Mahindra up by 1.65%, Tata Consumer Products up by 1.27%, Eternal up by 1.21% and Power Grid up by 1.14%. On the flip side, Hero MotoCorp down by 1.79%, Tech Mahindra down by 1.58%, JSW Steel down by 1.48%, HDFC Life Insurance down by 1.31% and Tata Steel down by 1.23% were the top losers.

European markets were trading mostly lower; France’s CAC fell 48.98 points or 0.63% to 7,702.91 and Germany’s DAX lost 114.45 points or 0.48% to 23,883.03, while UK’s FTSE 100 increased 3.95 points or 0.05% to 8,776.33.

Asian markets settled mostly down in thin trade on Monday amid both mainland China and Malaysian markets were closed for holidays. Market sentiments weakened by renewed Sino-US trade tensions as China accused the US of violating the Geneva trade truce over chip curbs and the Trump administration announced it will double the current tariff rate on steel and aluminum imports from 25% to 50%. Moreover, escalating Russia-Ukraine tensions and disappointing manufacturing data from China, Japan and South Korea also kept traders on edge. Japanese shares fell as a stronger yen weighed on export-related shares such as automakers.

Asian Indices

Last Trade            

Change in Points

Change in %      

Shanghai Composite

--

--

--

Hang Seng

23,157.97

-131.80

-0.57

Jakarta Composite

7,065.07

-110.75

-1.57

KLSE Composite

--

--

--

Nikkei 225

37,470.67

-494.43

-1.32

Straits Times

3,890.59

-4.02

-0.10

KOSPI Composite

2,698.97

1.30

0.05

Taiwan Weighted

21,002.71

-344.59

-1.64
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