Indian markets trade higher ahead of MPC meeting outcome

Indian equity markets continued to trade higher in late afternoon session ahead of Reserve Bank’s monetary policy committee (MPC) meeting outcome. The MPC will announce its decision on key interest rates on June 6 and market participants are optimistic about a policy shift, with inflation being well under RBI’s target. Besides, India’s services sector maintained gaining momentum in the month of May 2025, amid higher exports with the strongest improvements in international demand. According to the survey report, the seasonally adjusted HSBC India Services PMI Business Activity Index grew to 58.8 in May from 58.7 in April. However, gains remained capped as traders were cautious about persistent FII’s fund out flow. The FII were the net sellers in yesterday’s trade, offloading Rs 2,853.83 worth of shares.

On the global front, All Asian equity markets were trading higher after new data showed the U.S. labor market is holding up in the face of tariff uncertainty. European equity markets were trading higher ahead of ECB meeting. The European Central Bank (ECB) is widely expected to announce a 25-basis point reduction in its deposit rate, bringing it down to 2.00 percent, before pausing in the July meeting.

The BSE Sensex is currently trading at 80990.97, up by 253.46 points or 0.31% after trading in a range of 80705.18 and 81045.05. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index surged 0.55%, while Small cap index was up by 0.61%.

The top gaining sectoral indices on the BSE were Telecom up by 1.49%, Utilities up by 0.82%, TECK up by 0.80%, Basic Materials up by 0.53% and Metal up by 0.51%, while Realty down by 0.77% and Bankex down by 0.02% were the only losing indices on BSE.

The top gainers on the Sensex were Eternal up by 3.07%, Bharti Airtel up by 1.84%, Tech Mahindra up by 1.29%, Tata Motors up by 0.96% and Reliance Industries up by 0.93%. On the flip side, Bajaj Finserv down by 1.76%, Trent down by 1.50%, Axis Bank down by 0.84%, TCS down by 0.74% and ICICI Bank down by 0.60% were the top losers.

Meanwhile, India’s services sector maintained gaining momentum in the month of May 2025, amid higher exports with the strongest improvements in international demand. According to the survey report, the seasonally adjusted HSBC India Services PMI Business Activity Index grew to 58.8 in May from 58.7 in April. However, the HSBC India Composite PMI Output Index -- which measures both manufacturing and services -- eased to 59.3 in May as against 59.7 in April.

To accommodate for ongoing expansions in new business intakes, service providers continued to recruit additional staff. The increase in workforce numbers, coupled with overtime payments, added to firms' cost burdens. Some companies also cited greater outlays on cooking oil, material and meat. The overall rate of inflation edged above the series average and was the highest since the start of the current calendar year. Likewise, services charges in India rose to a greater degree halfway through the first fiscal quarter. The rate of inflation was the joint-strongest since November 2024 and historically marked.

The report further noted that there was an easing of capacity pressures at services companies, as outstanding business increased at a slower pace. The rate of accumulation was marginal and the weakest in eight months. The slower fall in backlogs of work was a result of jobs growth. Besides, there was a recovery in business sentiment during May, with the overall level of confidence rising from April's 23-month low.

The CNX Nifty is currently trading at 24621.50, up by 79.00 points or 0.32% after trading in a range of 24530.45 and 24632.00. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Eternal up by 2.94%, JIO Financial Services up by 2.43%, Bharti Airtel up by 1.85%, Tech Mahindra up by 1.24% and Indusind Bank up by 1.08%. On the flip side, Bajaj Finserv down by 1.80%, Trent down by 1.69%, Shriram Finance down by 1.03%, Axis Bank down by 0.82% and TCS down by 0.75% were the top losers.

All Asian markets are trading higher; Hang Seng advanced 141.54 points or 0.6% to 23,654.03, Jakarta Composite gained 13.29 points or 0.19% to 7,058.11, KOSPI increased 71.87 points or 2.59% to 2,770.84, Nikkei 225 surged 300.64 points or 0.8% to 37,747.45, Taiwan Weighted added 491.16 points or 2.27% to 21,618.09, Straits Times rose 2.73 points or 0.07% to 3,897.11 and Shanghai Composite strengthened 14.22 points or 0.42% to 3,376.20.

European markets were trading higher; UK’s FTSE 100 increased 9.97 points or 0.11% to 8,796.99, France’s CAC rose 53.88 points or 0.69% to 7,817.72 and Germany’s DAX gained 212.55 points or 0.87% to 24,304.17.