Shares ease off after two-day run, eyes on Fed decision

After a two-day sprint, the bulls hit the pause button on Tuesday. Benchmark indices closed in the red, as investors turned cautious ahead of the U.S. Fed's policy decision and rising geopolitical tensions between India and Pakistan kept nerves on edge.

The day's trading played out like a rollercoaster'starting with a subdued opening, diving sharply mid-session, and settling into a narrow band till the finish. Amid the gloom, the auto sector emerged as the sole outperformer, revving ahead while the rest of the sectoral pack idled. Sector indices on the NSE ended in a sea of red, with PSU banks and realty names taking the brunt of the sell-off.

By the close, the S&P BSE Sensex shed 155.77 points, or 0.19%, to finish at 80,641.07. The Nifty 50 slipped 81.55 points, or 0.33%, to settle at 24,379.60. This comes after a two-session rally in which the Sensex had climbed 0.69% and the Nifty advanced 0.52%.

Adani Enterprises (down 4.05%), Bajaj Finance (down 1.52%) and Reliance Industries (down 0.74%) were major drags.

But the real bruises were felt in the broader market. The S&P BSE MidCap index plunged 2.16%, while the SmallCap index fell even harder, dropping 2.33%. Both significantly underperformed the frontline indices, highlighting the intensity of profit booking in mid- and small-cap stocks.

The market breadth was weak. On the BSE, 779 shares rose and 3167 shares fell. A total of 126 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, rallied 3.58% to 19.

Economy:

The seasonally adjusted HSBC India Services PMI Business Activity Index reached 58.7 in April, up from 58.5 in March, indicating a sharp and stronger expansion in service sector output. The headline figure was above its long-run average of 54.2.

The latest data showed a modest acceleration in growth of aggregate output, as signaled by the HSBC India Composite PMI Output Index rising from 59.5 in March to 59.7. The latest reading was consistent with a sharp rate of expansion that was the strongest since August 2024.

Numbers to Track:

The yield on India's 10-year benchmark federal paper rose 2.01% to 6.450 as compared with previous close 6.419.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 84.4050, compared with its close of 84.3000 during the previous trading session.

MCX Gold futures for 5 June 2025 settlement added 1.98% to Rs 96,522.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was down 0.08% to 99.72.

The United States 10-year bond yield rose 0.30% to 4.356.

In the commodities market, Brent crude for July 2025 settlement added $1.57 or 2.61% to $61.80 a barrel.

Global Markets:

The US Dow Jones index futures were currently down by 193 points, signaling a negative opening for US stocks today.

Most Asian stocks ended higher on Tuesday as investors sifted through the latest whispers on U.S. trade moves and a weakening dollar. Japan and South Korea, meanwhile, hit the snooze button for public holidays.

India may be angling for a tariff truce, reportedly floating a zero-duty deal on steel, auto parts, and pharma goodies'provided the favor is returned. Over in Malaysia, officials said the U.S. is game for more talks and might even consider trimming tariffs.

Adding to the optimism, U.S. Treasury Secretary Scott Bessent chimed in Monday, saying deals were 'very close''a tune President Trump had already been humming over the weekend.

Meanwhile, China's markets reopened post-Labor Day to a slightly more diplomatic mood between Washington and Beijing.

China's Caixin Services PMI clocked in at 50.7 for April'a seven-month low and a step down from March's 51.9. Still above the 50-mark (which separates growth from contraction), but just barely.

Across the Pacific, U.S. stocks dipped slightly on Monday as investors braced for the Federal Reserve's next move. Energy stocks led the decline, with Wall Street adopting a 'wait-and-see' stance amid shifting trade winds.

The Dow Jones edged down 0.24%, while the S&P 500 fell 0.64% and NASDAQ slipped 0.74%. Investors are eyeing the Fed's two-day policy meeting starting Tuesday, with an interest rate verdict expected Wednesday.

Oil majors Exxon Mobil and Chevron both took hits as crude prices tumbled to a four-year low. Blame it on OPEC+ deciding to pump more oil for the second month running.

Skechers USA shares sprinted up over 24% after the company agreed to a $9.4 billion buyout by 3G Capital. Berkshire Hathaway stumbled 5% after reporting a 14% drop in Q1 operating earnings.

New Listing:

Shares of Ather Energy were at Rs 302.50 on the BSE, representing a discount of 5.76% as compared with the issue price of Rs 321.

The scrip was listed at Rs 326.05, exhibiting a discount of 7.22% to the issue price. The stock has hit a high of 332.90 and a low of 300. On the BSE, over 18.06 lakh shares of the company were traded in the counter.

Stocks in Spotlight:

The Nifty PSU Bank index tumbled 4.84% to 6,235.20. State Bank of India (SBI) (down 2.18%), Indian Bank (down 3.02%), UCO Bank (down 3.31%), Bank of Maharashtra (down 3.38%), Punjab National Bank (PNB) (down 4.93%), Canara Bank (down 5.22%), Central Bank of India (down 5.32%), Punjab & Sind Bank (PSB) (down 5.67%), Indian Overseas Bank (IOB) (down 5.88%), Union Bank of India (down 6.19%), Bank of India (down 6.33%) slumped.

Bank of Baroda slumped 10.91%. It reported a 3.29% jump in standalone net profit to Rs 5,047.7 crore on 6.14% increase in total income to Rs 35,852 crore in Q4 FY25 over Q4 FY24.

Cummins India declined 5.10% after its U.S.-based parent, Cummins Inc., withdrew its full-year guidance, citing uncertainty arising from potential trade tariffs introduced by the Trump administration.

Yes Bank rose 1.18% following reports that Japan's Sumitomo Mitsui Banking Corp. (SMBC) has received approval from the Reserve Bank of India (RBI) to acquire up to a 51% stake in the private sector lender. The bank however denied media reports, calling the claims speculative and factually incorrect. The bank stated that while it routinely explores strategic opportunities, no discussions have reached a stage requiring regulatory disclosure.

Coforge shed 1.05%. The IT company reported a 20.81% jump in consolidated net profit from continuing operations to Rs 305.9 crore in Q4 FY25 as compared with Rs 253.2 crore in Q3 FY25. Revenue from operations increased 4.66% QoQ to Rs 3,409.9 crore in Q4 FY25.

CCL Products (India) surged 17% after the company's consolidated net profit jumped 56.18% to Rs 101.86 crore in Q4 FY25 as compared with Rs 65.22 crore in Q4 FY24. Revenue from operations increased 15.02% YoY to Rs 835.84 crore during the quarter ended 31st March 2025.

Indian Hotels Company dropped 6.09% after the company's consolidated net profit fell 10.30% to Rs 522.3 crore in Q4 FY25 as against Rs 582.32 crore in Q3 FY25. Revenue from operations declined 4.26% to Rs 2,425.14 crore in Q4 FY25 over Q3 FY25

Computer Age Management Services fell 5.26%. The company has reported 10.2% increase in consolidated net profit to Rs 114.02 crore on a 14.7% rise in revenue from operations to Rs 356.17 crore in Q4 FY25 over Q4 FY24.

Jammu & Kashmir Bank declined 3.25% after the company reported 8.47% decline in net profit to Rs 584.54 crore in Q4 FY25, compared with Rs 638.67 crore in Q4 FY24. However, total income jumped 15.35% year on year to Rs 3,616.16 crore in Q4 FY25.

Unicommerce eSolutions added 1.02% after the company's consolidated net profit rose 16.4% to Rs 3.35 crore on 70.6% increase in net sales to Rs 45.27 crore in Q4 March 2025 over Q4 March 2024.

Polycab India added 1.88% after the company's consolidated net profit spiked 32.68% to Rs 734.40 crore on a 24.92% rise in revenue from operations to Rs 6,985.8 crore in Q4 FY25 over Q4 FY24.

Bombay Dyeing & Manufacturing Company dropped 6.21% after the company's consolidated net profit tumbled 82.63% to Rs 11.54 crore in Q4 FY25 as against Rs 66.46 crore posted in Q4 FY24. Revenue from operations declined 5.68% year on year to Rs 359.02 crore in the quarter ended 31 March 2025.

Paras Defence and Space Technologies declined 1.68%. The company has signed a memorandum of understanding (MoU) with Israel-based HevenDrones to establish a joint venture for manufacturing logistics and cargo drones in India.

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