Key gauges end flat amid volatility on Wednesday

Indian equity benchmarks ended flat in a highly volatile trade on Wednesday amid growing concern over geopolitical tensions and selling in PSU, Industrials and Basic Materials stocks. After a muted start, the markets traded within a narrow range on the weekly expiry day and eventually settled with minor cuts. However, rotational buying in heavyweight stocks across sectors helped to cushion the downside. 

Some of the important factors in today’s trade:  

Tariff war to put MSMEs under greater stress: India Ratings and Research has said the escalation of the tariff war in April will aggravate stress for MSMEs particularly entities in the sectors where the impact of the tariff war is negative. 

Indian economy to grow despite global uncertainties: A finance ministry report has said that with the right strategies in place, continued domestic reforms, and a strong focus on infrastructure development and job creation, Indian economy can demonstrate resilient growth despite global uncertainties. 

India’s first trade deal with US: US Treasury Secretary Scott Bessent has said that India is likely to be among the first countries to finalise a bilateral trade agreement with the US to avert reciprocal tariffs by President Donald Trump.  

Rupee rises against US Dollar: Indian rupee surged against the US dollar as trade-deal hopes and foreign fund inflows boosted investor sentiments. US President Donald Trump's statement that tariff talks with India are in a positive direction enthused investors.

Positive global cues: European markets were trading higher amid expectations of a potential trade deal with the United States. Asian markets ended mostly in green on Wednesday as traders also awaited key U.S. GDP and inflation data as well as earnings from big tech companies like Apple and Amazon for directional cues.

Finally, the BSE Sensex fell 46.14 points or 0.06% to 80,242.24, and the CNX Nifty was down by 1.75 points or 0.01% to 24,334.20.       

The BSE Sensex touched high and low of 80,525.61 and 79,879.15 respectively. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.72%, while Small cap index was down by 1.74%.

The top gaining sectoral indices on the BSE were Realty up by 1.80%, Telecom up by 0.94%, TECK up by 0.23% and Auto up by 0.06%, while PSU down by 1.40%, Industrials down by 1.20%, Basic Materials down by 0.93%, Power down by 0.89% and Utilities down by 0.88% were the top losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 3.04%, Bharti Airtel up by 2.18%, Sun Pharma up by 1.41%, Power Grid Corporation up by 1.12% and HDFC Bank up by 0.81%. On the flip side, Bajaj Finserv down by 5.45%, Bajaj Finance down by 4.99%, Tata Motors down by 3.22%, SBI down by 2.91% and Ultratech Cement down by 1.87% were the top losers.

Meanwhile, India Ratings and Research (Ind-Ra) has said that reciprocal tariffs will exacerbate stress for medium, small and micro enterprises (MSMEs) but mid-sized corporates have a greater cushion against unanticipated financial shocks. With the worsening of operating conditions owing to the escalation of tariff war in April 2025, It expects MSMEs to turn more vulnerable, especially in the sectors where the impact of tariff war is negative.

As of March 31, 2024, its analysis suggested that 23 per cent of MSMEs remained stressed compared to 11 per cent for MCs (mid-corporates). MCs are better positioned than pre-COVID levels to manage business cycles. A study of 1,898 listed and unlisted MSMEs and 1,055 MCs highlights that MCs have a greater cushion against unanticipated financial shocks than MSMEs, given their healthy financial metrics.

Neermoy Shah, Associate Director - Emerging Corporates at Ind-Ra, said ‘Capex intensity is usually low as MSMEs grapple more with working capital issues than MCs, and need adequate finance at competitive rates to manage those. Additionally, MSMEs - unlike MCs - are largely promoter-driven entities and lack a capable second line of management who have the knowledge and skill sets to bargain with lenders/suppliers/customers’. Besides, Ind-Ra opined that the reciprocal tariffs will exacerbate stress for MSMEs, with revenue below Rs 250 crore and investment in plant and machinery below Rs 5 crore as of March 31, 2024, with moderate to high intensity.

The CNX Nifty traded in a range of 24,396.15 and 24,198.75. There were 15 stocks advancing against 35 stocks declining on the index.   

The top gainers on Nifty were HDFC Life Insurance up by 4.19%, Maruti Suzuki up by 3.18%, SBI Life Insurance up by 1.80%, Bharti Airtel up by 1.70% and Sun Pharma up by 0.89%. On the flip side, Bajaj Finserv down by 5.61%, Bajaj Finance down by 5.27%, Trent down by 4.76%, Tata Motors down by 3.32% and SBI down by 3.07% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 10.7 points or 0.13% to 8,474.16, France’s CAC rose 41.25 points or 0.55% to 7,597.12 and Germany’s DAX gained 132.95 points or 0.59% to 22,558.78. 

Asian markets ended mostly in green on Wednesday following positive cues from US markets overnight. There were also some positive developments on the trade front, with US Commerce Secretary Howard Lutnick stating that the Trump administration has reached its first trade deal. Meanwhile, US Treasury Secretary Scott Bessent also said the U.S. is very close to a trade deal with India, has had substantial talks with Japan and has the contours of a deal with South Korea. However, Chinese market ended lower on growth worries after a survey showed China's factory activity contracted at the fastest pace in 16 months in April. The official purchasing managers' index came in at 49.0 in April due to escalating trade war with the U.S. U.S. Treasury Secretary Scott Bessent said that China could lose 10 million jobs quickly if the U.S. keeps tariffs in place at the current level of 145 percent.