Global gloom sends bulls into a retreat, Nifty below 24,950 mark

Equity benchmarks ended slightly in the red today, logging a second straight day of losses as investor sentiment remained fragile. Moody's downgrade of the U.S. credit outlook, coupled with mixed economic cues from China, kept the markets on edge. A spike in U.S. Treasury yields further unnerved investors. Rising yields often signal growing concerns over debt sustainability. The Nifty closed below the 24,950 mark, weighed down primarily by IT stocks, which took a hit in the wake of the U.S. rating downgrade.

The S&P BSE Sensex declined 271.17 points or 0.33% to 82,059.42. The Nifty 50 index fell 74.35 points or 0.30% to 24,945.45. In the past two trading session Sensex and Nifty declined 0.57% and 0.47%.

Grasim Industries (up 2.75%), Infosys (up 1.92%) and Reliance Industries (up 1.03%) were major drags.

The broader market outperformed the frontline indices. The S&P BSE Mid-Cap index rose 0.27% and the S&P BSE Small-Cap index jumped 0.75%.

The market breadth was strong. On the BSE, 2,531 shares rose and 1,565 shares fell. A total of 177 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, rallied 4.86% to 17.36.

Economy:

India's forex reserves jumped by $4.553 billion to $690.617 billion for the week ended May 9 on the back of a steep increase in gold assets, the RBI said on Friday.

For the week ended May 9, foreign currency assets, a major component of the reserves, increased by $196 million to $581.373 billion, the data released on Friday showed.

Gold reserves jumped by $4.518 billion to $86.337 billion during the week, the RBI said.

The Special Drawing Rights (SDRs) were down by $26 million to $18.532 billion, the apex bank said.

India's reserve position with the IMF was also down by $134 million at $4.374 billion in the reporting week, the apex bank data showed.

Numbers to Track:

The yield on India's 10-year benchmark federal paper fell 0.14% to 6.222 compared with the previous close of 6.231.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 85.4050, compared with its close of 85.5700 during the previous trading session.

MCX Gold futures for 5 June 2025 settlement rose 1.30% to Rs 93,640.

The US Dollar Index (DXY), which tracks the greenback's value against a basket of currencies, was down 0.92% to 100.16.

The United States 10-year bond yield advanced 2.32% to 4.542.

In the commodities market, Brent crude for July 2025 settlement fell 87 cents or 1.33% to $64.54 a barrel.

Global Markets:

Dow Jones futures were down 313 points on Monday, indicating a weak opening for U.S. equities.

The decline followed Moody's decision to downgrade the U.S. sovereign credit rating from AAA to AA1 on Friday, citing concerns over the country's rising debt burden, which currently stands at approximately $36 trillion. The ratings agency also noted that proposed tax cuts by President Donald Trump could further strain fiscal conditions.

The downgrade was met with criticism from the Trump administration, which pointed to initiatives aimed at reducing government spending. Among them is the Department of Government Efficiency, led by Elon Musk. However, progress on these initiatives has been limited so far.

European shares fell on Monday as investors turned their attention to several key geopolitical developments impacting the region. First, there's the much-anticipated U.K.-EU summit taking place in London on Monday. Later, U.S. President Donald Trump will be holding a call with Russia's President Vladimir Putin

Asian stocks ended lower, influenced by the U.S. credit downgrade and mixed economic data from China. The momentum from last week's rally, driven by easing tensions in the U.S.-China tariff dispute, faded toward the end of the week.

Recent data from China showed: Industrial production increased by 6.1% year-on-year in April, surpassing expectations but slowing from the previous month's 7.7% growth. Retail sales rose by 5.1% y-o-y, below the 5.9% growth seen in March. Fixed asset investment grew by 4.0% y-o-y, missing expectations due to continued business uncertainty amid trade tensions.

On Friday, U.S. equities ended higher. The Dow Jones Industrial Average rose 0.78%, reaching a one-month high. The S&P 500 gained 0.70%, and the Nasdaq Composite added 0.52%. Gains were led by the healthcare, utilities, and telecommunications sectors.

However, sentiment data released the same day showed weakness. The University of Michigan's preliminary consumer sentiment index for May came in at 50.8, down from 52.2 in April and below the forecasted increase to 53.4.

Stocks In Spotlight:

The Nifty IT index slipped 1.30% after Moody's downgraded the US sovereign credit rating, rattling investor sentiment. Since a significant portion of Indian IT firms' revenue comes from the US, the downgrade sparked fresh concerns about demand and spending outlook.

Mphasis (down 2.67%), Infosys (down 2.01%), Coforge (down 1.73%), Tata Consultancy Services (down 1.22%), Tech Mahindra (down 1.21%), Wipro (down 1.09%), Oracle Financial Services Software (down 0.85%), Persistent Systems (down 0.59%), LTIMindtree (down 0.55%), HCL Technologies (down 0.54%) dropped.

Vodafone Idea nosedived 8.6% after the Supreme Court reportedly dismissed its writ petition seeking urgent relief on Adjusted Gross Revenue (AGR) dues. The ripple effect hit Indus Towers too, with shares sliding up to 2.8%. Following the development, stock exchanges have sought clarification from Vodafone Idea. A response is still awaited.

Protean eGov Technologies hit the lower circuit of 20% after the company announced that it has not been shortlisted for the next round of bidding in the Income Tax Department's PAN 2.0 project. The Income Tax Department has invited bids for the selection of a Managed Service Provider (MSP) for the design, development, implementation, operations, and maintenance of its upgraded PAN infrastructure.

Shares of graphite electrode makers Graphite India (up 16.78%) and HEG (up 7.84%) surged after the media reported that Japan's Resonac Holdings will shut down production units in China and Malaysia due to sustained margin pressure. Industry watchers see this as a tailwind for Indian graphite players, who may benefit from higher global demand, improved realizations, and reduced competition in key export markets.

HFCL rose 1.42% after the government issued draft rules to open up the lower 6GHz band for unlicensed use, a move that could supercharge India's ambitions for 6G and next-generation Wi-Fi deployment. This announcement is expected to unlock significant opportunities in the telecom equipment space. For HFCL, which is considered a front-runner in India's 6G hardware ecosystem, the move could lead to an uptick in domestic orders.

Divis Laboratories rallied 4.81% after the pharma major's consolidated net profit jumped 23.04% to Rs 662 crore in Q4 FY25 as against Rs 538 crore recorded in Q4 FY24. Revenue from operations grew by 12.24% year on year (YoY) to Rs 2,585 crore in the quarter ended 31 March 2025.

Banco Products (India) hit an upper circuit of 20% after the company's consolidated net profit soared 125.20% to Rs 153.50 crore in Q4 FY25 as against Rs 68.16 crore posted in Q4 FY24. The company's revenue from operations jumped 21.04% YoY to Rs 868.40 crore in the quarter ended 31 March 2025.

Heritage Foods tumbled 4.7% after its consolidated net profit slipped 5.74% to Rs 38.16 crore in Q4 FY25 as against Rs 40.49 crore in Q4 FY24. However, revenue from operations jumped 10.30% year on year to Rs 1,048.5 crore in Q4 FY25.

Bharat Bijlee tanked 10.30%. The company reported a standalone net profit of Rs 50.31 crore in Q4 FY25, up 3.66% as against Rs 48.53 crore in Q4 FY24. Revenue from operations jumped 5.38% year on year to Rs 619.10 crore in the fourth quarter of FY25.

Data Patterns (India) fell 2.30%. The company's standalone net profit surged 60.45% to Rs 114.08 crore in Q4 FY25 as against Rs 71.10 crore posted in Q4 FY24. The company's revenue from operations zoomed 117.35% YoY to Rs 396.21 crore in the quarter ended 31 March 2025.

Delhivery surged 9.44% after the company reported a consolidated net profit of Rs 72.56 crore in Q4 FY25, compared with net loss of Rs 68.47 crore in Q4 FY24. Revenue from operations increased 5.6% YoY to Rs 2,191.57 crore in Q4 FY25.

Kalpataru Projects International added 2.57% after the company's consolidated net profit jumped 37.2% to Rs 225.41 crore on 18.3% increase in revenue from operations to Rs 7066.77 crore in Q4 FY25 over Q4 FY24.

Dodla Dairy rose 3.17% after the dairy product maker reported 45.12% surge in consolidated net profit to Rs 67.96 crore on 15.51% jump in revenue from operations to Rs 909.62 crore in Q4 FY25 over Q4 FY24.

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