Benchmarks trim opening gains to trade flat with positive bias

Indian equity benchmarks made optimistic start on Tuesday tracking gains in Asian counterparts. But, soon markets trimmed their gains and are trading near natural lines with positive bias amid selling in stocks such as ITC, Tech Mahindra. Initially, market participants took some support as the India Meteorological Department (IMD) said that India is likely to receive above average monsoon rains this year, retaining its April forecast. Above average rains will help India, which depends heavily on the summer rains for its farm output, boost agriculture and overall economic growth. However, gains got trimmed amid foreign fund outflows. In the domestic market, foreign institutional investors (FIIs) offloaded shares worth Rs 541.22 crore on Monday. Broader indices -- BSE Mid and Small Cap -- are underperforming larger peers with marginal cut. 

On the global front, Asian markets are trading mostly higher with marginal gains, following the broadly positive cues from the European markets overnight, as traders remain cautious ahead of key inflation readings from the U.S., Europe, Japan and Australia later in the week, which could help traders access the timing and pace of interest rate cuts this year.

Back home, insurance industry stocks are in focus with ICRA’s report that the general insurance industry is expected to earn a gross direct premium income (GDPI) of Rs 3.7 lakh crore by FY26, an increase of 32 per cent from Rs 2.8 lakh crore in FY24. In stock specific development, Natco Pharma climbed after full-year net profit nearly doubled. Also, LIC rose after posting a margin rise in Q4 net profit.

The BSE Sensex is currently trading at 75460.83, up by 70.33 points or 0.09% after trading in a range of 75387.73 and 75585.40. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.07%, while Small cap index was down by 0.46%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.70%, Basic Materials up by 0.40%, Metal up by 0.36% and Consumer Durables up by 0.05%, while Realty down by 1.01%, Power down by 0.52%, PSU down by 0.41%, Telecom down by 0.40% and Industrials down by 0.40% were the top losing indices on BSE.
The top gainers on the Sensex were Ultratech Cement up by 1.16%, Sun Pharma up by 0.76%, Tata Steel up by 0.60%, Mahindra & Mahindra up by 0.59% and Wipro up by 0.57%. On the flip side, ITC down by 0.58%, Tech Mahindra down by 0.58%, Bharti Airtel down by 0.47%, Power Grid down by 0.42% and Kotak Mahindra Bank down by 0.29% were the top losers.

Meanwhile, retaining its April forecast, the India Meteorological Department (IMD) has said that India is likely to receive above average monsoon rains this year. Above average rains will help India, which depends heavily on the summer rains for its farm output, boost agriculture and overall economic growth. The India Meteorological Department (IMD) said India likely to experience normal rainfall (92-108 per cent of long period average of 166.9 mm) in June. Barring a few parts of southern peninsular India, normal to above-normal maximum temperatures expected in country in June.

It noted that ‘Conditions favourable for onset of monsoon over Kerala in next 5 days’. It added that ‘India's monsoon core zone comprising most of the rain-fed agriculture areas likely to receive above normal rainfall.’ According to IMD, below-normal monsoon rainfall predicted in northeast India, normal in northwest, and above normal in central and south peninsular India. It also added that Northwestern and central parts of the country are likely to get some relief from scorching heat after three days due to a fresh western disturbance.

According to IMD chief Mrutyunjay Mohapatra, Rajasthan and Gujarat saw nine to 12 heat wave days, with temperatures reaching 45-50 degrees Celsius. He said ‘Expect relief from the heat wave in northwest and central parts of the country after three days due to a western disturbance and moisture incursion from the Arabian Sea. There could be some thunderstorm activity in northwest India and rain in the western Himalayan region’. He added Delhi, south Haryana, southwest UP and Punjab recorded five-seven heat wave days, with maximum temperatures ranging from 44 degrees Celsius to 48 degrees Celsius. Assam also experienced a heat wave with record breaking temperatures on May 25-26. The IMD attributed the heat wave in northwest India and some parts of the central region in the second half of May to the lack of rainfall, stronger dry and warm winds and an anti-cyclonic circulation over southwest Rajasthan and adjoining Gujarat.

The CNX Nifty is currently trading at 22958.55, up by 26.10 points or 0.11% after trading in a range of 22936.55 and 22992.40. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Divi's Lab up by 2.81%, Hindalco up by 2.01%, Dr. Reddy's Lab up by 1.57%, HDFC Life Insurance up by 1.41% and Ultratech Cement up by 1.27%. On the flip side, Adani Ports & SEZ down by 0.98%, Coal India down by 0.58%, ITC down by 0.49%, Tech Mahindra down by 0.47% and Kotak Mahindra Bank down by 0.44% were the top losers.

Asian markets are trading mostly in green; Hang Seng jumped 109.4 points or 0.58% to 18,936.75, Taiwan Weighted surged 97.17 points or 0.44% to 21,900.94, Jakarta Composite rose 75.49 points or 1.04% to 7,251.91, Straits Times gained 12.46 points or 0.37% to 3,330.91, KOSPI increased 1.05 points or 0.04% to 2,724.04 and Shanghai Composite was up by 0.19 points or 0.01% to 3,124.23, while Nikkei 225 slipped 71.56 points or 0.18% to 38,828.46.