Bourses trade near neutral lines in early afternoon session

In a volatile trading session, Indian markets traded near neutral lines with negative bias in early afternoon session. Investors were closely tracking a string of quarterly results scheduled for today. Traders were cautious as Moody’s Ratings, downgraded the US government’s credit rating by one notch, highlighting deepening concerns over the nation’s fiscal stability. For the first time in over a century, the United States has lost its top-tier credit status from all major rating agencies. However, losses were limited as India and the European Union (EU) chief negotiators have concluded another round of talks on the proposed free trade agreement (FTA) and agreed to reach a deal in two phases. The 11th round of talks concluded on May 16, 2025. On the global front, Asian markets were trading mostly in red despite China's industrial production increased more than expected in April. Industrial output logged an annual growth of 6.1 percent in April after rising 7.7 percent in March. However, this was stronger than the expected increase of 5.7 percent.

The BSE Sensex is currently trading at 82275.36, down by 55.23 points or 0.07% after trading in a range of 82116.00 and 82424.10. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.63%, while Small cap index was up by 1.08%.

The top gaining sectoral indices on the BSE were Realty up by 1.96%, Healthcare up by 0.94%, Utilities up by 0.85%, Power up by 0.73% and Auto was up by 0.70%, while IT down by 0.91%, TECK down by 0.75%, Energy down by 0.26%, Oil & Gas down by 0.19% and Metal was down by 0.09% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 0.89%, SBI up by 0.80%, Power Grid up by 0.77%, Bajaj Finance up by 0.74% and Axis Bank up by 0.68%. On the flip side, Eternal down by 1.81%, Infosys down by 1.50%, TCS down by 1.18%, Reliance Industries down by 0.88% and Tata Steel down by 0.67% were the top losers.

Meanwhile, the credit rating agency ICRA in its report has said that India's apparel and home textiles trade with the United Kingdom is poised for significant growth, with volumes expected to double over the next five to six years, driven by the recently concluded Free Trade Agreement (FTA) between the two countries. The FTA is expected to be operational in calendar year (CY) 2026, subject to legal review. Moreover, under the agreement, India will reduce tariffs on 90 per cent of British goods, with 85 per cent becoming completely duty-free over a period of ten years, while in return, Britain has agreed to lower its tariffs on certain products, resulting in 99 per cent of India's exports to the UK facing zero duties.

Pointing out the underutilized trade partnership between both countries given the size and potential of both economies, ICRA has said that India-UK trade accounts for around 2 per cent of India's total trade. Meanwhile, it added that, India is currently the 12th largest trading partner of the UK and stands in fifth position as far as apparel and home textiles imports are concerned. In CY2024, apparel and home textiles imported by the UK from India stood at $1.4 billion, representing a 6.6 per cent share of textiles imported by the UK. Furthermore, the US and the European Union (EU) continue to be the major export markets for Indian apparel and home textiles exporters, accounting for a 61 per cent share in CY2024. It further added that while the UK's share had remained stable at 7-8 per cent over the past five years amidst flattish growth, the same is expected to reach 11-12 per cent by CY2027, reflecting an 11 per cent CAGR between CY2024 and CY2027.

ICRA highlighted that currently the UK levy an 8-12 per cent duty on apparel and home textiles imported from India and with tariffs being eliminated on 99 per cent of Indian goods, including textiles, incremental capacities are likely to be added in the next 4-5 years to execute orders. In calendar year 2024, China was the biggest apparel and home textiles exporter to the UK with a 25 per cent share, followed by Bangladesh (22 per cent share), Turkey (8 cent share) and Pakistan (6.8 per cent share). Post-implementation of the FTA, with zero-duty access on apparel and home textiles exported, India would have a level playing field compared to the existing duty-free access nation status like Bangladesh, Vietnam, and Pakistan.

The CNX Nifty is currently trading at 25008.85, down by 10.95 points or 0.04% after trading in a range of 24965.80 and 25062.95. There were 28 stocks advancing against 21 stocks declining on the index, while 1 stock remained unchanged. 

The top gainers on Nifty were Bajaj Auto up by 2.95%, Eicher Motors up by 1.37%, Hero MotoCorp up by 1.21%, Shriram Finance up by 0.95% and NTPC up by 0.92%. On the flip side, Eternal down by 1.90%, Infosys down by 1.53%, Tata Consumer down by 1.30%, TCS down by 1.08% and Dr. Reddy's Lab down by 1.02% were the top losers.

Asian markets were trading mostly in red; Taiwan Weighted lost 319.86 points or 1.49% to 21,523.83, Nikkei 225 slipped 255.09 points or 0.68% to 37,498.63, Hang Seng declined 37.46 points or 0.16% to 23,307.59, KOSPI dropped 23.45 points or 0.9% to 2,603.42 and Straits Times was down by 11.2 points or 0.29% to 3,886.67. On the flip side, Shanghai Composite strengthened 0.43 points or 0.01% to 3,367.89 and Jakarta Composite was up by 41.65 points or 0.58% to 7,148.18.