Key gauges snap two-day gaining streak on Tuesday

Snapping the two-day rally, Indian equity benchmarks ended lower by over half percent on Tuesday after profit-taking in FMCG, IT and Auto shares. Investors also remained cautious ahead of the release of industrial and manufacturing production data for April on Wednesday and the first quarter GDP numbers, scheduled to be announced later this week.

Some of the important factors in today’s trade:

Rupee falls against US Dollar: Indian rupee depreciated against the US dollar, tracking a recovery in American currency index, negative domestic equity market and muted foreign fund inflow.

Government restores RoDTEP benefits for AA, SEZ, EOU exports: With an aim to boost India’s export competitiveness in global markets, the Government of India has restored benefits under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme for exports made by Advance Authorization (AA) holders, Export-Oriented Units (EOUs), and units operating in Special Economic Zones (SEZs).

India's exports to reach $1 trillion in FY26: Federation of Indian Export Organisations (FIEO) said the country's overall goods and services exports are expected to reach $1 trillion during 2025-26. In 2024-25, the exports were aggregated at $825 billion.

India to become 4th largest economy in world by overtaking Japan by end of 2025: NITI Aayog member Arvind Virmani has said India is set to become the fourth largest economy in the world by overtaking Japan by the end of 2025. 

Global front: European markets were trading higher amid continued optimism surrounding the delay of U.S. President Donald Trump's proposed 50 percent tariff on EU imports. Asian markets ended mixed on Tuesday as investors awaited new tariff updates and assessed the impact of U.S. President Donald Trump's policies on global growth. 

Finally, the BSE Sensex fell 624.82 points or 0.76% to 81,551.63 and the CNX Nifty was down by 174.95 points or 0.70% to 24,826.20.    

The BSE Sensex touched high and low of 82,410.52 and 81,121.70 respectively. There were 5 stocks advancing against 25 stocks declining on the index. 

The broader indices ended in green; the BSE Mid cap index rose 0.18%, while Small cap index was up by 0.19%.

The top gaining sectoral indices on the BSE were Telecom up by 0.78%, Industrials up by 0.53%, Capital Goods up by 0.42%, Realty up by 0.25% and Consumer Durables up by 0.08%, while FMCG down by 0.79%, IT down by 0.71%, Auto down by 0.66%, Energy down by 0.61% and Bankex down by 0.60% were the top losing indices on BSE.

The top gainers on the Sensex were Trent up by 0.89%, Sun Pharma up by 0.42%, Adani Ports &SEZ up by 0.34%, Bharat Electronics up by 0.17% and Asian Paints up by 0.06%. On the flip side, Ultratech Cement down by 2.21%, ITC down by 2.01%, Tata Motors down by 1.73%, Axis Bank down by 1.59% and NTPC down by 1.40% were the top losers.

Meanwhile, Economic think tank Global Trade Research Initiative (GTRI) has said that the US, despite reporting a $44.4 billion trade deficit with India, runs a $35-40 billion overall surplus when revenues from education, digital services, financial activities, royalties, and arms trade are factored in. It said for India, this means it has every reason to walk into free trade agreement negotiations with confidence, pushing back hard against inflated deficit claims and demanding fair, balanced terms that reflect the full economic relationship, not just a narrow, cherry-picked slice of the ledger.

In 2024-25, the US has recorded a trade deficit of about $44.4 billion with India, which means Washington has imported far more goods and services from India than it exported. US President Donald Trump has on multiple occasions highlighted this gap, accusing India of unfairly benefiting from trade. Washington is also using the deficit figures to push India to unilaterally lower tariffs and open its market further.

GTRI Founder Ajay Srivastava said this trade deficit narrative is misleading and incomplete. He stated ‘according to the think tank, the US quietly rakes in $80-85 billion every year from India through education, digital services, financial operations, intellectual property royalties, and arms sales. These massive earnings do not show up in the narrow goods trade statistics. When you factor them in, the US isn't running a deficit with India at all - it's sitting on a $35-40 billion surplus.’ He added that there's no reason for India to hand over sweeping concessions in sectors that have nothing to do with balancing trade, especially when these concessions would only further boost America's already dominant earnings from the Indian market.

In FY25, trade between India and the US reached $186 billion as per the commerce ministry data. India exported $86.5 billion in goods while importing $45.3 billion, creating a goods trade surplus of $41 billion. In services, India exported an estimated $28.7 billion and imported $25.5 billion, adding a $3.2 billion surplus. Altogether, India ran a total trade surplus of about $44.4 billion with the US.

The CNX Nifty traded in a range of 25,062.90 and 24,704.10. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were JIO Financial Services up by 3.87%, Indusind Bank up by 2.61%, Trent up by 0.80%, Adani Ports & SEZ up by 0.33% and Sun Pharma up by 0.32%. On the flip side, Ultratech Cement down by 2.28%, JSW Steel down by 2.02%, ITC down by 1.85%, Tata Motors down by 1.65% and Grasim Industries down by 1.63% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 82.09 points or 0.94% to 8,800.06, France’s CAC rose 22.14 points or 0.28% to 7,850.27 and Germany’s DAX gained 187.96 points or 0.78% to 24,215.61.

Asian markets ended mixed on Tuesday as investors assessed the impact of US President Donald Trump's policies on global growth. Meanwhile, rising Covid-19 cases across Southeast Asia kept traders cautious. Chinese shares declined, despite industrial firms reporting faster profit growth in April. The People's Bank of China has asked major lenders to raise the share of yuan when facilitating cross-border trade. Seoul shares dipped on profit booking. Hong Kong shares rose ahead of upcoming China PMI data. Japanese shares gained as the yen weakened and yields fell on super long-dated bonds ahead of a bond auction, with reports suggesting that the finance ministry might issue fewer super-long bonds.