Indices drift higher in early trade; breadth strong

The key equity indices traded with limited gains in early trade. The Nifty traded above the 24,700 level. The market displayed resilience despite concerns over rising interest rates in the U.S. and the widening federal deficit. Traders are expected to closely monitor bond market movements and global economic developments.

FMCG, IT and oil & gas shares advanced while pharma and consumer durables shares declined.

At 09:25 IST, the barometer index, the S&P BSE Sensex, added 242.65 points or 0.30% to 81,190.80. The Nifty 50 index advanced 97.90 points or 0.40% to 24,705.25.

In the broader market, the S&P BSE Mid-Cap index advanced 0.35% and the S&P BSE Small-Cap index jumped 0.25%.

The market breadth was strong. On the BSE, 1,679 shares rose and 996 shares fell. A total of 140 shares were unchanged.

Foreign portfolio investors (FPIs) sold shares worth 5,045.36 crore, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 3,715 crore in the Indian equity market on 22 May 2025, provisional data showed.

Stocks in Spotlight:

Sun Pharmaceutical Industries fell 3.75% after the company's consolidated net profit declined 19% to Rs 2,149.88 crore despite a 8.5% fall in revenue from operations to Rs 12,815.58 crore in Q4 FY25 over Q4 FY24.

ITC advanced 1.33% after the company's consolidated net profit surged 285.3% to Rs 19,727.37 crore on 9.9% increase in revenue from operations (excluding excise duty) to Rs 18,565.05 crore in Q4 FY25 over Q4 FY24.

Honasa Consumer soared 12.42%. The company reported 18% decline in consolidated net profit to Rs 24.98 crore in Q4 FY25 compared with Rs 30.48 crore in Q4 FY24. Revenue from operations jumped 13.3% YoY to Rs 533.56 crore in Q4 FY25.

Numbers to Track:

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 85.9475, compared with its close 85.9500 during the previous trading session.

MCX Gold futures for 5 June 2025 settlement added 0.16% to Rs 95,684.

The US Dollar Index (DXY), which tracks the greenback's value against a basket of currencies, was down 0.28% to 99.65.

The United States 10-year bond yield declined 0.44% to 4.533.

In the commodities market, Brent crude for July 2025 settlement fell 41 cents or 0.64% to $64.03 a barrel.

Global Markets:

Most Asian stocks gained on Friday as investors evaluated fresh economic data and monitored diplomatic signals. A call between Chinese Vice Foreign Minister Ma Zhaoxu and U.S. Deputy Secretary Christopher Landau led to an agreement to maintain communication, according to a statement from China's Foreign Ministry. The two officials discussed key bilateral issues, though no further details were provided.

In Japan, the core consumer price index (CPI), excluding fresh food, rose 3.5% year-on-year in April'up from 3.2% in March and marking the highest rate since early 2023. A separate core CPI measure, which strips out both fresh food and energy and is closely watched by the Bank of Japan, rose to 3% from 2.9%, remaining above the central bank's 2% target. Headline inflation held steady at 3.6%.

Investors are also reviewing South Korea's producer price index (PPI) for April and New Zealand's Q1 retail sales figures.

In the U.S., markets closed mixed Thursday. The Dow Jones Industrial Average was nearly flat, falling 1.35 points. The S&P 500 edged down 0.04%, while the Nasdaq Composite rose 0.28%. Concerns about rising interest rates and the growing federal deficit weighed on sentiment. The 30-year Treasury yield climbed to its highest level since 2023 after lawmakers passed a bill that markets believe could widen the deficit.

Meanwhile, the U.S. S&P Global Composite PMI rose to 52.1 in May from 50.6 in April, indicating stronger private-sector activity. The Manufacturing PMI climbed to 52.3 from 50.2, and the Services PMI rose to 52.3 from 50.8.

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