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Informist, Monday, Jun. 2, 2025

By Akash Mandal

MUMBAI – The benchmark indices looked past the better-than-expected GDP data for the March quarter to end lower amid intensification of the conflict between Russia and Ukraine and the back-and-forth on tariffs between the US and China. Indices were in the red for the entire session, falling nearly 1% at their intraday lows, but pared the losses to end the session slightly lower from Friday's close.

"While the GDP data was much higher than expected, the market was already expecting positive macro numbers... at this point, the market is focussing on future-looking events rather than things that have already happened," Sunny Agrawal, head of fundamental equity research at SBICAPS Securities, said. "That is why we are seeing the fresh conflict between Russia and Ukraine over the weekend and the tariff uncertainty between US and China weighing more."

Volatility soared in the market owing to the global uncertainties. The India VIX, the fear gauge of the Street, ended nearly 7% higher at 18.76. The indicator had soared over 10% early in the session. The Nifty 50 ended at 24716.60 points, down 34.10 points or 0.1%. Information technology stocks, automobile companies, and heavyweights such as HDFC Bank, Infosys, and Reliance Industries weighed on the market. The BSE Sensex closed at 81373.75 points, down 77.26 points or 0.1%. In comparison, broader market indices ended with robust gains and the small-cap indices ended around 1% higher.

Sentiment was dampened after Ukraine Sunday launched its biggest attack of the war with Russia, targeting Russian bases and nuclear bombers. Russia retaliated by launching 472 drones at Ukraine. Both countries are set for peace talks Monday after an earlier attempt Friday was inconclusive.

China and the US also went back and forth on tariffs over the weekend, further weakening sentiment. US President Donald Trump accused China of violating a bilateral deal on tariffs and doubled the tariffs on imports of steel and aluminium to 50%. China Monday accused the US of violating the trade agreement between the countries and said it would take strong counter measures. Both countries had held positive tariff talks last month, which had boosted investors' hopes of the tensions easing.

Following the US-China developments, stocks in sectors such as metals, information technology, and automobiles, dependent in some way on either of the countries, fell sharply. Most metal stocks declined and the Nifty Metal index ended nearly 1% lower after the US said it would double the existing 25% tariffs on steel and aluminium imports from Jun. 4. This increases the chances of producers such as China dumping steel into the country, putting pressure on domestic producers. Lloyds Metals and Energy, JSW Steel, and Tata Steel ended 1-3% lower.

IT stocks such as Persistent Systems, Tech Mahindra, and Wipro also fell 1-2% as uncertainty on the tariffs front flared up again, fanning concerns of a rise in inflation and a slowdown in economic growth. Mphasis ended 3% lower. The stock had fallen as much as 7% on media reports of FedEx, one of its biggest clients, cancelling a deal with the company.

Many automobile stocks also ended lower despite decent sales data for May as analysts expect the adverse impact of China's ban on exports of rare-earth magnets to show up in the production of Indian companies from June or July. The Chinese government had banned these exports Apr. 4. The Nifty Auto ended flat, having fallen around 1% earlier in the session. Hero MotoCorp, Tata Motors, and Bajaj Auto ended 1-2% lower. However, Mahindra & Mahindra and Eicher Motors ended in the green on robust sales growth in May.

Rate-sensitive sectors such as the Nifty Realty and the Nifty PSU Bank ended higher ahead of the Reserve Bank of India's monetary policy meeting later this week. Most fast-moving consumer goods stocks also ended higher after the government decided to reduce the basic customs duty on edible oil by 10%. Godrej Consumer Products, Britannia Industries, and United Spirits ended 2-3% higher.

Most Adani group stocks were also big winners during the session. Most of these stocks rose sharply but closed off their intraday highs after the group's Chairman Gautam Adani said the conglomerate intends to invest $15 billion-$20 billion across its businesses over the next five years, driven by record earnings and a focus on renewable energy, ports, and infrastructure projects. Adani Ports and Special Economic Zone, Adani Power, and Adani Energy Solutions closed 1-3% higher.

Some stocks also reacted to their March quarter earnings. Apollo Hospitals Enterprise had risen 3% at its intraday high as the company's bottom line for the March quarter beat the Street's view, and the company also provided a positive outlook for the financial year 2025-26 (Apr-Mar). The stock gave up most of its gains and ended just slightly higher. AstraZeneca closed over 16% higher after its top line and bottom line for the quarter saw robust growth on year.

YES Bank gained over 8% as Sumitomo Mitsui Banking Corp. sought a licence from the RBI to operate a wholly-owned subsidiary in the country in a move to acquire controlling stake in the private-sector lender. The Japanese group had on May. 9 signed a definitive agreement to acquire 20% stake in YES Bank from State Bank of India and some other private-sector banks.

Swan Energy closed over 4% lower and was among the worst hit in the Nifty 500 as its revenue fell on year in the March quarter despite the bottom line rising manyfold on year. Niva Bupa Health Insurance Co. fell as much as 12% after nearly 13.18 million shares of the company were sold through multiple block deals on the NSE at an average price of INR 83.20 per share, with the company's promoters being the likely sellers. The stock ended over 9% lower.

Two stocks also made their debut on the bourses Monday--Aegis Vopak Terminals and Schloss Bangalore. Shares of Aegis Vopak ended at INR 242.00 on the National Stock Exchange, up 10% from its listing price of INR 220.00 and 3% from its issue price of INR 235.00. Schloss Bangalore ended its first session at INR 435.55 on the NSE, up over 7% from its listing price of INR 406.00, but just marginally higher than its issue price of INR 435.00.

* Of the Nifty 50 stocks, 20 rose and 30 fell 

* Of the Sensex stocks, 12 rose and 18 fell

* On the NSE, 1,529 stocks rose, 1,402 fell, and 83 were unchanged

* On the BSE, 2,128 stocks rose, 1,992 fell, and 167 were unchanged

* Nifty Realty: up 2.3%; Nifty PSU Bank: up 2.2%; Nifty IT: down 0.7%

BSE                                               NSE

Sensex: 81373.75, down 77.26 points or 0.1%       Nifty 50: 24716.60, down 34.10 points or 0.1%

End

Edited by Rajeev Pai

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