Post Session: Quick Review

Indian equity benchmarks closed in negative territory on Monday, weighed down by weak global cues. Markets made a cautious start, pressured by selling in IT and TECK stocks, as overall sentiment remained subdued following Moody’s downgrade of the U.S. government’s credit rating on Friday. In afternoon session, indices slipped into deep red and remained lower till end of the day.

Some of the important factors in today’s trade:

US remittance tax plan may hit Indian households, rupee: Some cautiousness came as think tank GTRI said that a proposed 5 per cent US tax on remittances sent abroad by non-citizens is raising alarm in India as it may hit Indian households and the rupee.

India, EU conclude another round of FTA talks: Traders took note of the 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. 

India's forex reserves hit 7-month high of $690.6 billion: Traders overlooked Reserve Bank of India (RBI) data showed that India's foreign exchange reserves (forex) rose $4.553 billion to $690.617 billion in the week that ended on May 9.   

Global front: European markets were trading in red, as investors reacted to Moody's downgrade of U.S. credit rating and mixed economic data from China.  Asian markets ended 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.

The BSE Sensex ended at 82059.42, down by 271.17 points or 0.33% after trading in a range of 81964.57 and 82424.10. There were 10 stocks advancing against 20 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.27%, while Small cap index up by 0.75%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 2.22%, Healthcare up by 0.58%, Utilities up by 0.42%, Auto up by 0.41% and Consumer Durables up by 0.38%, while IT down by 1.23%, TECK down by 1.07%, Energy down by 0.37%, Oil & Gas down by 0.32% and Telecom down by 0.24% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Power Grid Corp up by 1.30%, Bajaj Finance up by 0.91%, NTPC up by 0.64%, SBI up by 0.35% and Indusind Bank up by 0.31%. On the flip side, Eternal down by 2.87%, Infosys down by 2.08%, TCS down by 1.33%, Tech Mahindra down by 1.20% and Asian Paints down by 0.98% were the top losers. (Provisional)

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 ended at 24945.45, down by 74.35 points or 0.30% after trading in a range of 24916.65 and 25062.95. There were 17 stocks advancing against 33 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bajaj Auto up by 4.34%, Shriram Finance up by 1.85%, Power Grid Corp up by 1.28%, Bajaj Finance up by 0.97% and Hero MotoCorp up by 0.81%. On the flip side, Grasim Industries down by 2.92%, Eternal down by 2.87%, Infosys down by 2.01%, Tata Consumer Products down by 1.54% and Tech Mahindra down by 1.30% were the top losers. (Provisional)

European markets were trading lower; France’s CAC fell 56.72 points or 0.72% to 7,829.97, UK’s FTSE 100 decreased 53.9 points or 0.62% to 8,630.66, and Germany’s DAX lost 54 points or 0.23% to 23,713.43.

Asian markets settled mostly lower on Monday as Moody's downgrade of the US credit rating reinforced concern about the US sovereign bond market. Also weighing on the market were comments from US Treasury Secretary Scott Bessent that President Trump will impose tariffs at the rate he threatened last month on trading partners that do not negotiate in good faith. Japanese shares declined as the yen strengthened on expectations of a Bank of Japan interest rate hike. Meanwhile, China announced that it will impose up to 75% of anti dumping duties on plastic imports from the United States, European Union, Taiwan and Japan. Chinese markets ended unchanged after mixed economic data. Industrial output held up in April but retail sales and investment disappointed as firms and households turned more cautious due to the trade war, data showed.