Markets trade higher in early deals as inflation cools

Indian equity indices have made a positive start and are trading higher by over 0.35 percent in early morning session on Wednesday on account of buying by funds and retail investors. Meanwhile, broader indices outperformed their large peers with BSE Mid cap index and Small cap index gaining in the range of 0.75-0.80%. Sentiments got boost after the official data showed India's consumer price inflation eased further in April to the lowest level in nearly six years amid a slower rise in food prices. Consumer price inflation eased to 3.16 percent in April 2025 from 3.34 percent in March. It was the lowest year-on-year inflation after July 2019. Cooling domestic inflation raised expectations of potential rate cuts by the Reserve Bank of India. There was some encouragement in markets as Union Minister Ashwini Vaishnaw has said that the investors have continued to exude a high level of confidence in India's economy, the Prime Minister's policy and the country's talent.

On the global front, Asian markets were trading mostly in green as U.S.-China tensions eased. Back home, all the sectoral indices were trading in green led by Metal, Telecom, TECK, Basic Materials and Industrials. 

The BSE Sensex is currently trading at 81509.22, up by 361.00 points or 0.44% after trading in a range of 81184.89 and 81646.86. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.75%, while Small cap index up by 0.77%.

The top gaining sectoral indices on the BSE were Metal up by 2.00%, Telecom up by 1.35%, TECK up by 1.27%, Basic Materials up by 1.06% and Industrials up by 0.95%, while there were no losers. 

The top gainers on the Sensex were Bharti Airtel up by 1.54%, Power Grid up by 1.49%, Adani Ports up by 1.42%, Larsen & Toubro up by 0.90% and Axis Bank up by 0.90%. On the flip side, Titan down by 2.02%, Tata Motors down by 1.12%, Asian Paints down by 0.43%, NTPC down by 0.37% and TCS down by 0.17% were the top losers.

Meanwhile, Global Trade Research Initiative (GTRI) has said that India's proposal to impose retaliatory import duty on certain US products in response to American tariffs on steel and aluminium could cast a shadow over ongoing negotiations for a trade agreement between the two countries. GTRI said that if the US engages in consultations with India on the matter or withdraws tariffs, a resolution may be reached.

Otherwise, India's retaliatory import duties could take effect in early June, potentially impacting US exporters and deepening trade frictions. In a significant move targeting US safeguard duties on steel, aluminium, and their derivative products, India has formally notified the World Trade Organisation (WTO) of its intention to suspend trade concessions granted to the US.

The proposed suspension of concessions could take the form of increased tariffs on selected US products. While India has not disclosed those items yet, in a similar move in 2019, it had imposed retaliatory tariffs on 28 US products, ranging from almonds and apples to chemicals. The notice, issued on May 12, marks India's invocation of its rights under a provision of the WTO Agreement on Safeguards (AoS).

This legal provision allows a country to retaliate when another member imposes safeguard measures without proper notification or consultations. India had sought consultations with the US in April, but Washington responded that the tariffs were imposed on national security grounds and should not be considered as safeguard measures.

GTRI Founder Ajay Srivastava said ‘India's latest WTO action comes at a delicate moment. New Delhi and Washington are exploring a broader free trade agreement, and this retaliation could cast a shadow over negotiations.’ He stated the move signals a tougher Indian stance, especially in politically sensitive sectors like steel and aluminium that align with its Make in India industrial strategy. He added ‘Much now depends on Washington's response. If the US engages in consultations or withdraws the contested measures, a resolution may be reached. Otherwise, India's tariff response could take effect in early June.’

The CNX Nifty is currently trading at 24666.25, up by 87.90 points or 0.36% after trading in a range of 24581.75 and 24737.55. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Bharat Electronics up by 0.97%, HDFC Life Insurance up by 0.67%, HCL Technologies up by 0.64%, JSW Steel up by 0.54% and Bajaj Finserv up by 0.53%. On the flip side, Cipla down by 1.65%, Mahindra & Mahindra down by 0.53%, Asian Paints down by 0.24%, Titan down by 0.23% and Kotak Mahindra Bank down by 0.22% were the top losers. 

Asian markets were trading mostly in green; Hang Seng advanced 335.39 points or 1.43% to 23,443.66, Jakarta Composite gained 111.11 points or 1.6% to 6,943.91, Shanghai Composite strengthened 6.3 points or 0.19% to 3,381.17, KOSPI increased 33.44 points or 1.27% to 2,641.86 and Taiwan Weighted added 330.64 points or 1.53% to 21,660.78. However, Straits Times fell 9.59 points or 0.25% to 3,871.46 and Nikkei 225 slipped 260.4 points or 0.69% to 37,922.86.