Indian markets exhibit weak trade despite positive services PMI data

A positive services PMI data failed to cheer the sentiments over the Dalal Street, with both Sensex and Nifty closing lower. After a slightly positive start, indices turned red and remained lackluster till the end, impacted with ongoing geopolitical tensions and all eyes on the US Fed’s interest rate decision due on Wednesday.

Some of the important factors in today’s trade: 

Moody's cuts India's GDP projection: Moody's Ratings in its Global Macro Outlook 2025-26 (May update) has cut India's Gross Domestic Product (GDP) growth projection to 6.3 per cent for 2025 calendar year, from 6.5 per cent, and said that economies globally will see a slowdown on account of heightened US policy uncertainty and trade restrictions.

Hopes for cut in key interest rate by RBI: A SBI Research report titled 'Inflation and Rate Cut Trajectory' has said that the Reserve Bank of India (RBI) may cumulatively cut the key interest rate in the range of 125-150 basis points (bps) this fiscal (FY26) amid benign inflationary patterns. It suggested that the central bank should go for ‘jumbo’ rate cuts of 50 bps as it would be more effective. 

India’s services sector regains momentum: India’s services sector regained momentum in the month of April, driven by a quicker increase in new order inflows, which also underpinned a faster expansion in employment. According to the survey report, the seasonally adjusted HSBC India Services PMI Business Activity Index jumped to 58.7 in April from 58.5 in March. 

'One State, One RRB' to boost RRBs lending in agriculture and allied activities: Emphasizing the importance of the amalgamation, the Financial Services Secretary M Nagaraju has said that with the implementation of ‘One State, One RRB’, regional rural banks will expand their lending in agriculture and allied activities, MSME and government-sponsored schemes.

Mixed cues from the global markets: European markets were trading lower, while Asian markets ended mostly higher, as Middle East tensions intensified and U.S. President Donald Trump's tariff order on movies along with plans to cut reliance on foreign-made medicines reignited concerns about the potential fallout of a global trade war.

Finally, the BSE Sensex fell 155.77 points or 0.19% to 80641.07, and the CNX Nifty was down by 81.55 points or 0.33% to 24379.60.

The BSE Sensex touched high and low of 80981.58 and 80481.03 respectively. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell by 2.16%, while Small cap index was down by 2.33%.

The only gaining sectoral indices on the BSE were TECK up by 0.11% and Auto up by 0.07%, while Realty down by 3.49%, PSU down by 2.77%, Power down by 2.64%, Utilities down by 2.36%, Oil & Gas down by 2.09% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.91%, Tata Steel up by 1.62%, Mahindra & Mahindra up by 1.59%, Hindustan Unilever up by 1.40% and Nestle up by 1.06%. On the flip side, Eternal down by 3.08%, Tata Motors down by 2.09%, SBI down by 2.01%, Adani Ports & SEZ down by 1.96% and NTPC down by 1.95% were the top losers.

The CNX Nifty traded in a range of 24331.80 and 24509.65. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Hero MotoCorp up by 2.79%, Bharti Airtel up by 1.88%, Tata Steel up by 1.66%, Mahindra & Mahindra up by 1.55% and Hindustan Unilever up by 1.41%. On the flip side, Adani Enterprises down by 4.13%, JIO Financial Serv. down by 3.61%, Eternal down by 3.03%, Trent down by 2.73% and SBI Life Insurance down by 2.48% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 17.27 points or 0.2% to 8,579.08, France’s CAC fell 39.58 points or 0.51% to 7,688.35 and Germany’s DAX lost 208.71 points or 0.9% to 23,135.83.

Asian markets ended mostly higher in thin trade on Tuesday as investors watched the latest developments in trade negotiations. Besides, Malaysia said that Washington had agreed for further talks and there could be a cut in tariffs. Chinese stocks resumed trading after the Labor Day holidays amid signs of Washington and Beijing taking a more conciliatory approach to resolving trade disputes after resorting to tit-for-tat tariffs. A private survey showed China's services activity deteriorated more than expected in April to hit a 7-month low, raising concerns about the state of the economy but fueling speculation over new stimulus measures. Hong Kong's Hang Seng index jumped with tech stocks such as Alibaba and Baidu leading the surge on optimism over Sino-U.S. talks. Stock markets in Japanese and South Korean were closed for public holidays.