Key gauges trim some gains in morning deals

Indian equity benchmarks trimmed some of their initial gains but continued to trade in green in morning deals, led by gains in Power, Auto and Industrials stocks. Traders took support with the State Bank of India’s (SBI) report stated that the Reserve Bank of India's (RBI’s) record dividend payout of nearly Rs 2.7 trillion to the government has been made possible due to robust gross dollar sales, higher foreign exchange gains, and steady increases in interest income. Moreover, early arrival of monsoon and US President Donald Trump delaying 50 per cent EU tariffs to July 9 also added to the optimism of the market. However, gains remain capped some concern came with as the Reserve Bank of India (RBI) reporting that India's foreign exchange reserves (forex) dipped $4.888 billion to $685.729 billion in the week ending May 16. On the global front, Asian markets are trading mostly in red even as U.S. President Donald Trump extended a deadline for EU trade deal until 9 July, following a call with European Commission president. 

The BSE Sensex is currently trading at 82097.68, up by 376.60 points or 0.46% after trading in a range of 81867.23 and 82492.24. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.51%, while Small cap index was up by 0.63%.

The top gaining sectoral indices on the BSE were Power up by 0.99%, Auto up by 0.95%, Industrials up by 0.69%, Healthcare up by 0.69% and Capital Goods up by 0.67%, while there were no losing sectoral indices on the BSE. 

The top gainers on the Sensex were Mahindra & Mahindra up by 2.00%, Tata Motors up by 1.91%, Nestle up by 1.26%, Bajaj Finserv up by 1.18% and HCL Technologies up by 1.02%. On the flip side, Eternal down by 3.16%, Kotak Mahindra Bank down by 0.42%, Ultratech Cement down by 0.35% and Maruti Suzuki down by 0.04% were the top losers.

Meanwhile, the State Bank of India (SBI) in its latest report has said that the Reserve Bank of India's (RBI’s) record dividend payout of nearly Rs 2.7 trillion to the government has been made possible due to robust gross dollar sales, higher foreign exchange gains, and steady increases in interest income. The report noted that this significant surplus transfer was largely supported by the RBI's active participation in the foreign exchange market. In fact, the RBI was the largest seller of foreign exchange reserves among Asian central banks in January 2025. 

The central bank took aggressive steps to stabilize the rupee during the year, including large-scale dollar sales. In September 2024, India's foreign exchange reserves had peaked at $704 billion. Following that, the RBI sold a large volume of dollars to maintain currency stability. Gross dollar sales during the financial year (FY25), till February 2025, stood at a massive $371.6 billion, much higher than $153 billion recorded in the previous year (FY24). This aggressive selling helped the RBI book substantial foreign exchange gains, which added to the surplus.

Additionally, the RBI earned more income from its rupee securities. The central bank's holdings in rupee securities rose by Rs 1.95 lakh crore to Rs 15.6 lakh crore as of March 2025. Although a decline in government securities (G-sec) yields impacted the mark-to-market (MTM) gains on these holdings, the overall interest income saw a steady rise. The Contingent Risk Buffer (CRB), which acts as a safeguard against future risks, was maintained within a range of 7.5 per cent to 4.5 per cent of the RBI's balance sheet, as recommended by the central board.

The transferable surplus was calculated under the revised Economic Capital Framework (ECF), approved by the RBI's Central Board during its meeting on May 15, 2025. This large payout is a windfall for the government. The Union Budget for 2025-26 had projected a total dividend income of Rs 2.56 lakh crore from the RBI and public sector financial institutions. With this latest transfer, the actual amount will be much higher than the budget estimates.

The CNX Nifty is currently trading at 24956.80, up by 103.65 points or 0.42% after trading in a range of 24900.50 and 25079.20. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 2.08%, Hindalco up by 2.04%, Hero MotoCorp up by 1.85%, Tata Motors up by 1.79% and Bajaj Auto up by 1.44%. On the flip side, Eternal down by 3.22%, Bharat Electronics down by 0.94%, Shriram Finance down by 0.89%, JSW Steel down by 0.75% and Ultratech Cement down by 0.49% were the top losers.

Asian markets are trading mostly in red; Taiwan Weighted lost 49.76 points or 0.23% to 21,602.48, Hang Seng declined 235.2 points or 1.01% to 23,366.06, Straits Times fell 16.98 points or 0.44% to 3,865.44, Jakarta Composite plunged 59.35 points or 0.82% to 7,154.81 and Shanghai Composite weakened 9.95 points or 0.3% to 3,338.42.

On the flip side, Nikkei 225 surged 297.6 points or 0.8% to 37,458.07 and KOSPI increased 34.67 points or 1.34% to 2,626.76.