After a cautious start on Thursday, Indian benchmark equity indices didn’t really look back, with both the Nifty 50 and Sensex trading in the red for the most part of the day, largely mirroring the mixed global cues and domestic factors. After a record-breaking six-session winning streak, the market looked to catch its breath as investors digested some new global worries and looked ahead to several important economic data releases.
The Nifty 50 closed the day at 25,099.15, provisionally down by 42.25 points (0.17%) from its previous close. The BSE Sensex finished in the red at 82,345.34, down 169.80 points (0.21%). The overall market was resilient, Nifty Midcap 100 and Nifty Smallcap 100 indices ended in the green to red zone reflecting some profit booking after strong recent runs.
On the sectoral front, early on, the Nifty IT index was under pressure. Banking stocks, as represented by the Nifty Bank index, opened in the green, yet experienced volatility for the rest of the day. The Pharma and Media Industries provided positive momentum across the board. Stock-specific action was huge as Paytm’s share price tanked more than 10% after the post-Finance Ministry’s statement that Merchant Discount Rate (MDR) would not be applicable to UPI transactions raised worry over revenue visibility for the digital payment players. MapMyIndia plunged 24% after a block deal. In better news, Asian Paints and Bajaj Finserv emerged as the Nifty’s biggest gainers recently, along with state-run NTPC’s decision to raise $750 million through External Commercial Borrowing (ECB) to fund its diversification plans.
Global Cues & Inflation Focus
The risk-averse mood in the Indian markets was mainly a response to mixed global cues. Asian markets were a mixed bag with Japan’s Nikkei 225 and Hong Kong’s Hang Seng Index closing in the red, but Seoul’s Kospi was on the upswing. This mixed success story painted a modest picture for India.
Overnight, US markets closed slightly down even with all the talk about the possibility of a US-China trade deal being a done deal. Investors on Wall Street were largely responding to softer-than-expected US Consumer Price Index (CPI) data for May, which was released yesterday. The US consumer price index rose by an annual 2.4% in May, up from 2.3% in April but below the expected 2.5%. On a monthly basis, CPI only rose 0.1%, significantly undershooting expectations. While this should bolster expectations for a more dovish Fed, global investors were still on guard against the potentially far-reaching full impact.
Compounding this global uncertainty were increasing geopolitical tensions in the Middle East. Fears that new potential disruptions would crimp supply sent crude oil prices soaring, with Brent crude oil prices up to around $69.40 per barrel and near a two-month high. This unexpected spike in oil prices is likely to be a test for oil-importing countries such as India, affecting inflation as well as corporate margins in energy-sensitive sectors.
Homegrown Influences and Market Preview
Investor attention is sharply focused on the publication of India’s own CPI (Consumer Price Index) data for May, due today, June 12th, 2025. This inflation print will be important for gauging the domestic price situation and will be one of the most important variables guiding the RBI’s (Reserve Bank of India) future monetary policy stance.
In the institutional activity, Foreign Institutional Investors (FIIs) continued to be sellers on Wednesday as they sold shares worth ₹446.31 crore net. Domestic Institutional Investor (DII) activity data for today will be key to reading the overall sentiment. The Indian Rupee saw some firmer print against the US currency with the currency trading around ₹85.46 in early trade, helped by a fresh weakness in the American currency across the board and a marginal fall in crude oil prices, despite the pressure from the FII outflows.
Also check:- Indian Equities Maintain Momentum; Nifty Holds Above 25,100 Amid Global Cues
Markets, of course, are optimistic. Looking ahead, traders and investors alike will be watching trade developments across the globe, including between the US and China, and how the recently escalated geopolitical tensions in the Middle East play out. This week’s massive weekly derivatives expiry further added to today’s caution, as traders squared up their positions ahead of expiry. Market sentiment overall continues to lean cautiously optimistic thanks to India’s underlying economic fundamentals. Global headwinds and an approaching wave of domestic macroeconomic data releases indicate that volatility could remain in the short term. Our recommended strategy for investors is to keep being picky and invest mostly in companies that are fundamentally sound.
