Key gauges end in green terrain on Wednesday

Indian equity benchmarks were choppy in intra-day trades but managed to end in green on Wednesday as retail inflation eased to a nearly six-year low of 3.16 per cent in April, creating enough room for the RBI to go for another rate cut in the June monetary policy review. A cooling US April inflation data and a pause in global trade tensions added to the positive trend in the equity markets.

Some of the important factors in trade:

India's WPI inflation hits one-year low of 0.85% in April: Inflation based on wholesale price index (WPI) in India eased to 0.85% in April 2025 as against 2.05% in March 2025. WPI-based inflation was 1.19% in April last year. 

India's outward FDI surges 90% in April 2025: The Reserve Bank of India (RBI) in its latest report titled ‘Overseas Direct Investment for April 2025’ has showed that India’s outward foreign direct investment (OFDI) commitments rose 89.62% to $6,806.49 million in April 2025 from $3,589.53 million in April 2024. 

India's retaliatory tariff plan likely to strain trade pact talks with US: 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. 

Rupee rises against US Dollar: Indian rupee pared most of its initial gains and ended the day marginally higher against the American currency, supported by gains in domestic equities and positive macroeconomic data.

Global front: European markets were trading mostly in red as investors awaited cues from Thursday's U.S. retail sales data and upcoming talks between Ukraine and Russia in Istanbul. Asian markets settled mostly higher on Wednesday as a cautious sense of relief spread through regional markets after the US and China agreed to a 90-day pause in their trade war. 

Finally, the BSE Sensex rose 182.34 points or 0.22% to 81,330.56, and the CNX Nifty was up by 88.55 points or 0.36% to 24,666.90.    

The BSE Sensex touched high and low of 81,691.87 and 80,910.03 respectively. There were 20 stocks advancing against 10 stocks declining on the index. 

The broader indices ended in green; the BSE Mid cap index rose 1.19%, while Small cap index was up by 1.63%.

The top gaining sectoral indices on the BSE were Metal up by 2.46%, Industrials up by 1.73%, Realty up by 1.71%, Capital Goods up by 1.49% and Basic Materials up by 1.49%, while Bankex down by 0.34% was the lone losing index on BSE.

The top gainers on the Sensex were Tata Steel up by 3.88%, Eternal up by 2.18%, Tech Mahindra up by 2.02%, Mahindra & Mahindra up by 1.56% and Maruti Suzuki up by 1.50%. On the flip side, Asian Paints down by 1.78%, Tata Motors down by 1.26%, Kotak Mahindra Bank down by 1.11%, NTPC down by 0.85% and Power Grid Corporation down by 0.84% 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 traded in a range of 24,767.55 and 24,535.55. There were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 3.93%, Shriram Finance up by 2.75%, Bharat Electronics up by 2.61%, Hindalco up by 2.32% and Tech Mahindra up by 2.22%. On the flip side, Asian Paints down by 1.66%, Cipla down by 1.33%, Kotak Mahindra Bank down by 1.12%, Tata Motors down by 1.06% and Power Grid Corporation down by 0.72% were the top losers.

European markets were trading mostly in red; France’s CAC fell 48.64 points or 0.62% to 7,825.19 and Germany’s DAX lost 122.62 points or 0.52% to 23,515.94, while UK’s FTSE 100 increased 0.58 points or 0.01% to 8,603.50.

Asian markets settled mostly higher on Wednesday tracking Wall Street’s gains overnight after data showed consumer inflation rose less than expected in April, while investors are awaiting more clarity on ongoing trade talks. China lifted a ban on airlines taking delivery of Boeing planes after the United States and China reached a temporary truce in their trade war. The United States said it will reduce the ‘de minimis’ tariff on low-value Chinese goods, according to an executive order. Hong Kong shares gained, led by tech shares, while investors shifted their focus to corporate earnings. Although, Japanese shares declined as investors booked profits from a recent rally.