Key gauges end lower for 2nd straight day on Wednesday

Indian equity benchmarks declined for the second straight day on Wednesday due to losses in FMCG, Metal and Auto stocks. Investors trimmed positions ahead of the monthly futures and options expiry on Thursday. A lingering concern over India-US trade relations following the end of the 90-day pause period continued to pose an external risk.  

Some of the important factors in today’s trade:

FDI equity inflow in India falls 24.5% Y-o-Y in Q4FY25: The government data has said that foreign direct investment (FDI) equity inflow in India fell 24.5 per cent year-on-year (Y-o-Y) to $9.34 billion in the January-March quarter of 2024-25 but grew 13 per cent at $50 billion during the entire FY25.

US-India bilateral trade agreement could flip current headwinds into tailwinds: The Finance Ministry in its monthly economic review report has said that a successful US-India bilateral trade agreement could flip current headwinds into tailwinds, opening up new market access and energizing exports. India seeks full exemption from reciprocal tariffs before the July 8 deadline. 

India's goods, services exports likely to reach $1 trillion this fiscal: The apex exporters' body -- Federation of Indian Export Organisations (FIEO) has suggested that the country's overall goods and services exports are likely to reach $1 trillion during 2025-26. Meanwhile, the exports were aggregated at $825 billion in 2024-25. 

Coal stocks in focus: Ministry of Coal said that India's coal imports fell by 7.9 per cent, totalling 243.62 million tonnes (MT), compared to 264.53 MT during the just-concluded financial year 2024-25.

Global front: European markets were trading lower with investors mostly making cautious moves, looking for directional clues after recent gains on the back of U.S. President Donald Trump's decision to pause tariffs on EU goods till July 9th. Asian markets settled mixed on Wednesday despite a strong rally on Wall Street overnight driven by improved U.S. consumer confidence data and a global bond surge. 

Finally, the BSE Sensex fell 239.31 points or 0.29% to 81,312.32 and the CNX Nifty was down by 73.75 points or 0.30% to 24,752.45.    

The BSE Sensex touched high and low of 81,613.36 and 81,244.02 respectively. There were 10 stocks advancing against 20 stocks declining on the index. 

The broader indices ended mixed; the BSE Mid cap index fell 0.22%, while Small cap index was up by 0.50%.

The top gaining sectoral indices on the BSE were Telecom up by 1.41%, Industrials up by 0.53%, PSU up by 0.38%, Capital Goods up by 0.37% and TECK up by 0.16%, while FMCG down by 1.33%, Metal down by 0.69%, Auto down by 0.67%, Consumer Durables down by 0.58% and Basic Materials down by 0.52% were the top losing indices on BSE.

The top gainers on the Sensex were Bharat Electronics up by 1.32%, Bajaj Finance up by 1.07%, Bharti Airtel up by 0.65%, ICICI Bank up by 0.46% and Adani Ports &SEZ up by 0.46%. On the flip side, ITC down by 3.18%, Ultratech Cement down by 1.62%, Mahindra & Mahindra down by 1.41%, Power Grid Corporation down by 1.20% and Asian Paints down by 1.12% were the top losers.

Meanwhile, the Federation of Indian Export Organisations (FIEO) has said that Indian export consignments have gradually started moving through the Red Sea route again. The gradual movement signals a cautious recovery in shipments after months of disruptions on the route caused by regional tensions. Last year, the situation around the Bab-el-Mandeb Strait, a crucial shipping route connecting the Red Sea and the Mediterranean Sea to the Indian Ocean, escalated due to attacks by Yemen-based Houthi militants.

Due to attacks, the shippers were taking consignments through the Cape of Good Hope, encircling the African continent, resulting in delays of almost 14-20 days and higher freight and insurance costs. FIEO Director General Ajay Sahai said that ‘Consignments are gradually going through this important sea route. It will cut transportation time.’ He also said freight rates have stabilised because of a dip in ship demands from China.

Around 80 per cent of India's merchandise trade with Europe passes through the Red Sea and substantial trade with the US also takes this route. Both these geographies account for 34 per cent of the country's total exports. The Red Sea strait is vital for 30 per cent of global container traffic and 12 per cent of world trade. About 95 per cent of the vessels had rerouted around Cape of Good Hope adding 4,000-6,000 nautical miles and 14-20 days to journeys.

The CNX Nifty traded in a range of 24,864.25 and 24,737.05. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were HDFC Life Insurance up by 1.51%, Bharat Electronics up by 1.27%, Bajaj Finance up by 1.21%, Hero MotoCorp up by 0.87% and Bharti Airtel up by 0.63%. On the flip side, Indusind Bank down by 1.93%, Apollo Hospital down by 1.89%, Ultratech Cement down by 1.82%, Hindalco Industries down by 1.65% and Nestle down by 1.62%, and were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 14.73 points or 0.17% to 8,763.32, France’s CAC fell 6.37 points or 0.08% to 7,820.42 and Germany’s DAX lost 46.21 points or 0.19% to 24,180.28.

Asian markets settled mixed on Wednesday despite a strong rally on Wall Street overnight driven by improved prospects for a US-EU trade agreement, strong US consumer confidence data, and a global bond surge. Meanwhile, investors were awaiting US PCE inflation reading and the release of minutes from the Federal Reserve May meeting. Chinese shares declined after a large explosion at a chemical plant in eastern China. Hong Kong shares dipped even as Xiaomi reported better-than-expected revenue in the March quarter. The Nikkei 225 ended little changed and the yen wobbled in volatile trading as a weak government bond auction sparked a sell-off in the country's bond market. However, Seoul shares climbed as global trade tensions eased and a survey showed South Korea's business sentiment improved for the third straight month in May.