Benchmarks rebound sharply, snapping two-day losing streak

Domestic equity benchmarks snapped a two-day losing streak and ended with solid gains. Global stock markets climbed, brushing aside the Israel-Iran tensions as investors priced in geopolitical risks early and took comfort in the uninterrupted flow of oil through the Strait of Hormuz. Attention now turns to major central bank meetings this week, including the US Federal Reserve, along with the G7 summit in Canada. The Nifty ended above the 24,900 mark, reflecting a surge in market confidence. All sectoral indices on the NSE closed in the green, with IT and energy stocks taking the lead.

The S&P BSE Sensex gained 677.55 points or 0.84% to 81,796.15. The Nifty 50 index jumped 227.90 points or 0.92% to 24,946.50. The 50-unit index fell 1.68% in the previous two sessions.

Infosys (up 1.39%), HDFC Bank (up 0.93%) and ICICI Bank (up 0.75%) boosted the indices.

The broader market underperformed the frontline indices. The S&P BSE Mid-Cap index rose 0.87% and the S&P BSE Small-Cap index added 0.15%.

The market breadth was negative. On the BSE, 1,976 shares rose and 2,108 shares fell. A total of 169 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, fell 1.60% to 14.84.

Israel-Iran Tensions:

The conflict between Israel and Iran intensified over the weekend, with both sides exchanging missile strikes and air attacks. The escalation follows Israel's large-scale airstrike on multiple Iranian military and nuclear sites on Friday. The heightened tensions have rattled global market sentiment and pushed oil prices higher. However, for now, investors appear to believe the situation will not spill over into a broader regional conflict. Importantly, Iran has not signaled any move to block the Strait of Hormuz, a critical global shipping route, which would likely trigger a stronger response from the United States.

Economy:

India's wholesale price inflation (WPI) declined to a 14-month low of 0.39% in May 2025, down from 0.85% in April. This marks the lowest rate since March 2024, when it stood at 0.26%. The decline in WPI inflation was primarily driven by a sharp decrease in food prices.

Meanwhile, India's trade deficit for May 2025 narrowed to $21.88 billion from a five-month high of $26.42 billion in April, Commerce Ministry said on June 16. Imports declined 1.7% year-on-year to $60.61 billion, while exports dipped 2.2% to $38.73 billion in the same period.

Numbers to Track:

The yield on India's 10-year benchmark federal paper shed 0.37% to 6.277 from the previous close of 6.290.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 86.0500 compared with its close of 86.1125 during the previous trading session.

MCX Gold futures for 5 August 2025 settlement fell 0.45% to Rs 99,823.

The US Dollar Index (DXY), which tracks the greenback's value against a basket of currencies, was down 0.21% to 97.97.

The United States 10-year bond yield rose 0.18% to 4.432.

In the commodities market, Brent crude for August 2025 settlement fell 51 cents or 0.69% to $73.72 a barrel.

Global Markets:

US Dow Jones futures were up 182 points, signaling a strong start for Wall Street.

European shares advanced on Monday, rebounding from Friday's losses, which were triggered by escalating tensions as Israel and Iran launched airstrikes against each other, raising fears of a prolonged and deadly conflict.

Most Asian stocks ended higher, as investors kept a cautious eye on the geopolitical tensions while also digesting a fresh batch of Chinese economic data.

Back in Asia, the spotlight was on China. The country released a mix of economic indicators that painted a somewhat uneven picture. Retail sales in May shot up 6.4% from a year earlier, signaling a boost in consumer spending. But industrial output slowed to 5.8% year-on-year, down from 6.1% in April.

Meanwhile, fixed-asset investment rose 3.7% in the January-May period, slightly weaker than the 4% growth seen in the first four months. There was a silver lining, though: the urban unemployment rate dipped to 5.0% in May, the lowest since November 2023.

Over on Wall Street, all three major US indexes sank on Friday, spooked by the Middle East flare-up and surging energy prices. The Dow tumbled 1.79%, the S&P 500 fell 1.13%, and the Nasdaq slid 1.30%.

Focus was now squarely on a Federal Reserve meeting this week. The Fed is set to kick off a two-day meeting on Tuesday and is widely expected to keep interest rates unchanged, around 4.5%, at the end of the meeting on Wednesday.

Stocks in Spotlight:

The Nifty IT index jumped 1.57% to 39,073.05. The index increased 1.59% in the two consecutive trading sessions. Mphasis (up 2.30%), Persistent Systems (up 2.25%), Oracle Financial Services Software (up 2.08%), Tech Mahindra (up 2.07%), Coforge (up 1.92%), HCL Technologies (up 1.57%), Infosys (up 1.25%), Wipro (up 1%) and LTIMindtree (up 0.46%) advanced.

Tata Consultancy Services (TCS) rose 1.40% after the company announced a long-term strategic partnership with Salling Group to drive sustainability, technological innovation, and improve organizational efficiency.

Tata Motors dropped 3.56% after its UK-based unit, Jaguar Land Rover (JLR), issued a softer outlook for FY26, dampening investor sentiment. JLR now expects an EBIT margin of 5-7% for FY26, down from the 8.5% it clocked in FY25. Adding to the pressure, the company guided for free cash flow to be close to zero this year, compared to 1.5 billion pounds in FY25. The management is eyeing a rebound in free cash flow by FY27-28 and eventually aims to push EBIT margins back to 10%, though no specific timeline has been laid out.

Spicejet fell 2.19%. The company's standalone net profit surged 173% to Rs 324.87 crore in Q4 FY25 as against Rs 119 crore posted in Q4 FY24. However, revenue from operations fell 13.4% year on year to Rs 1,360.87 crore in the fourth quarter of FY25.

Omaxe soars 13.76% after the real estate firm unveiled plans to invest Rs 1,000 crore in developing a new integrated township near the Golden Temple in Punjab's Amritsar.

Belrise Industries rallied 2.53% after the company reported a 722.3% jump in net profit to Rs 110.02 crore while revenue rose 49% to Rs 2,274.35 crore in Q4 March 2025 over Q4 March 2024.

Sun Pharmaceutical Industries shed 0.19%. The pharma major announced the appointment of Kirti Ganorkar as the managing director (MD) of the company, effective 1 September 2025, for a term of five years. Meanwhile, the company confirmed that the USFDA conducted a Good Manufacturing Practices (GMP) inspection of its Halol facility in Gujarat, India, from 2 June to 13 June 2025. Upon the conclusion of the inspection, the USFDA issued a Form-483 with 8 observations.

Lupin added 0.56%. The company announced that it has signed a license and supply agreement with Sino Universal Pharmaceuticals (SUP) for the commercialization of Tiotropium Dry Powder Inhaler (DPI) capsules in China for the treatment of chronic obstructive pulmonary disease.

HBL Engineering gained 2.75% after the company announced that it had secured a contract worth Rs 132.95 crore from South Central Railway for the deployment of the indigenously developed Kavach safety system.

United Drilling Tools (UDTL) hit an upper limit of 20% after the company announced that it has secured a significant order from Oil and Natural Gas Corporation for the supply of large outer diameter (OD) casing pipes with connector totaling to Rs 107.55 crore.

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