Post Session: Quick Review

Indian equity benchmarks closed sharply lower on Tuesday, with both the Nifty and Sensex ending over 1% cut, amid foreign fund outflows. Markets made a positive start but gave up their initial gains, as investors were cautious ahead of key global trade developments. Selling pressure intensified in the second half of the session, dragging indices deep into the red, with most of the sectors ending in red.

Some of the important factors in today’s trade:

Foreign fund outflows: Traders were cautious after foreign institutional investors (FIIs) turned cautious in tandem on Monday, marking the first simultaneous selloff in over a month. Provisional NSE data showed that FIIs offloaded Indian equities worth Rs 526 crore on May 19. 

ICRA projects India's GDP growth at 6.9% in Q4: Traders overlooked ICRA’s report stating that it projected India's GDP growth at 6.9 per cent in the quarter ended March 31, 2025 (Q4) and at 6.3 per cent for the full 2024-25 fiscal, undershooting the National Statistics Office (NSO) estimates made in February. 

India, US discuss expediting conclusion of first phase of trade pact: Traders took note of Commerce and Industry Minister Piyush Goyal held discussions with US Commerce Secretary Howard Lutnick in Washington to expedite negotiations on the first phase of the proposed bilateral trade agreement between the two countries.

Global front: European markets were trading in green, as investors watched the latest developments on the trade front and reacted to widely expected rate cuts in China to stimulate consumption and loan growth. Asian markets ended mostly in green as People's Bank of China reduced its benchmark interest rate for the first time in seven months to stimulate consumption and support the property market amid soothing trade tensions.

The BSE Sensex ended at 81186.44, down by 872.98 points or 1.06% after trading in a range of 81153.70 and 82250.42. There were 3 stocks advancing against 27 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 1.65%, while Small cap index was down by 0.96%. (Provisional)

The top losing sectoral indices on the BSE were Auto down by 2.13%, Consumer Disc down by 1.81%, Utilities down by 1.64%, Power down by 1.43% and Industrials down by 1.36%, while there were no gaining sectoral indices on BSE. (Provisional)

The few gainers on the Sensex were Tata Steel up by 0.98%, Infosys up by 0.23% and ITC up by 0.06%. On the flip side, Eternal down by 3.99%, Maruti Suzuki down by 2.73%, Nestle down by 1.89%, Power Grid down by 1.87% and Ultratech Cement down by 1.82% were the top losers. (Provisional)

Meanwhile, expressing optimism over India’s manufacturing sector growth, S&P Global India Research Chapter's study, titled 'India Forward: Transformative Perspectives', has said that India made progress in making its manufacturing sector more attractive to global investors, and ongoing changes in international trade policy would benefit India in the long run. It said that as economies adapt to evolving trade dynamics and tariff challenges, India can capitalise on this momentum for accelerated manufacturing growth and greater global supply-chain integration.

It noted that a strategic shift towards local sourcing, proximity to end-markets, and enhanced regional integration should attract additional investment to the sector, accelerating India's technological advancement and manufacturing competitiveness and creating additional high-quality manufacturing jobs. It added ‘Beyond the near-term, changes in global trade policy would catalyse supply-chain diversification, to the benefit of India’. The study said India has made ‘notable progress’ in enhancing its competitiveness and making its manufacturing sector ‘more attractive to global investors’.

India remains the world's fastest-growing large economy despite a slowdown in real GDP growth in fiscal 2024-25. The S&P Global study said India has moderate dependence on external trade for growth, which cushions it somewhat from ongoing shifts in global trade and tariff policies, though it is not immune to the rising trade protectionism. While manufacturing value added accounts for a modest 17.2 per cent of the country's real gross domestic product (GDP), the government has implemented targeted policy interventions to build domestic manufacturing capacity and strengthen India's role in global supply chains. It noted ‘High-frequency HSBC Purchasing Managers' Index (PMI) data ... highlights the domestic manufacturing sector's resilience to recent global headwinds compared with other major economies’.

The CNX Nifty ended at 24683.90, down by 261.55 points or 1.05% after trading in a range of 24669.70 and 25010.35. There were 7 stocks advancing against 43 stocks declining on the index. (Provisional)

The top gainers on Nifty were Coal India up by 1.53%, Tata Steel up by 1.28%, ONGC up by 1.01%, Hindalco up by 0.67% and Dr. Reddy's Lab up by 0.34%. On the flip side, Eternal down by 4.21%, Hero MotoCorp down by 3.16%, Bajaj Auto down by 2.84%, Maruti Suzuki down by 2.69% and Shriram Finance down by 2.67% were the top losers. (Provisional)

European markets were trading higher; UK’s FTSE 100 increased 43.39 points or 0.5% to 8,742.70, Germany’s DAX gained 77.56 points or 0.32% to 24,012.54 and France’s CAC rose 13.83 points or 0.18% to 7,897.46.

Asian markets settled mostly higher on Tuesday amid investors were focusing on the outcome of US trade negotiations with India and Japan, following a 90-day pause on reciprocal tariffs between the US and China. Chinese shares gained after the People's Bank of China cut benchmark lending rates for the first time since October. PBoC slashed its one-year loan prime rate to 3% from 3.1%, while the five-year LPR was lowered by 10 basis points to 3.5%. Hong Kong shares rose as technology shares like Alibaba and Baidu surged on China's growth push. Japanese shares ended almost unchanged, giving up early gains supported by a weaker yen. However, investors were in caution about rising debt and tariff uncertainty following Moody's downgrade of the US credit rating.