Benchmarks trade with tiny gains; bank shares gain

The headline equity benchmarks traded with minor gains in mid-afternoon trade, despite optimism over a potential US-India trade deal and favorable global cues. Focus remained on foreign inflows and the upcoming end of the US tariff reprieve.

The Nifty traded above the 25,500 level. Bank shares advanced after declining in the past trading session.

At 14:26 IST, the barometer index, the S&P BSE Sensex, rose 85.15 points or 0.10% to 83,691.61. The Nifty 50 index added 21.30 points or 0.08% to 25,538.45.

The broader market underperformed the frontline indices. The S&P BSE Mid-Cap index declined 0.24% and the S&P BSE Small-Cap index fell 0.26%.

The market breadth was negative. On the BSE, 1,862 shares rose and 2,086 shares fell. A total of 155 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, declined 2.22% to 12.50.

Economy:

The seasonally adjusted HSBC India Manufacturing Purchasing Managers' Index (PMI) rose to a 14-month high of 58.4 in June, up from 57.6 in May. The headline figure was above its long-run average of 54.1 and pointed to a substantial improvement in the health of the sector. The manufacturing sector experienced a strong end to the first fiscal quarter, marked by improved trends in output and new orders, alongside a record upturn in employment.

June also saw a quicker upturn in new order inflows. The rate of expansion was the strongest in close to a year. According to panel members, the increase was supported by marketing efforts and a substantial rise in exports.

India's industrial output growth fell to a nine-month low of 1.2% in May 2025, dragged down by weak performance in the manufacturing, mining, and electricity sectors, data released by the National Statistical Office (NSO) on Monday showed. The factory output, measured by the Index of Industrial Production (IIP), had grown 6.3% in May 2024, while the April 2025 estimate has been revised to 2.6%, slightly down from the earlier 2.7%. According to the data, manufacturing ' which forms over three-fourths of the IIP ' grew 2.6% in May, down from 5.1% a year ago. Mining output shrank 0.1%, reversing a 6.6% expansion in May last year. Electricity generation saw a sharp contraction of 5.8% compared to a robust 13.7% growth a year ago.

India's gross collection of goods and services tax (GST) hit an all-time high of Rs 22.08 lakh crore in the financial year 2024-25, marking a 9.4% year-on-year (YoY) growth compared to the previous financial year, according to an official statement on Monday, 30 June 2025. On 1 July 2025, India will mark the completion of eight years since the implementation of the GST.

India's fiscal deficit for the first two months of FY26 stood at Rs 13,163 crore, or just 0.8% of the full-year target of Rs 15.69 lakh crore, according to data released by the Controller General of Accounts on Monday. The year-ago deficit for the same period was significantly higher at Rs 50,600 crore.

Buzzing Index:

The Nifty Bank index rose 0.34% to 57,507.80. The index fell 0.23% in the past trading session.

IDFC First Bank (up 5.75%), Punjab National Bank (up 2.33%), Federal Bank (up 2.29%), AU Small Finance Bank (up 2.17%), Canara Bank (up 1.46%), IndusInd Bank (up 1.4%), Kotak Mahindra Bank (up 0.78%), HDFC Bank (up 0.52%) and State Bank of India (up 0.09%) advanced.

On the other hand, Axis Bank (down 2.36%), ICICI Bank (down 0.57%) and Bank of Baroda (down 0.49%) edged lower.

Numbers to Track:

The yield on India's 10-year benchmark federal paper slipped 0.28% to 6.306 from the previous close of 6.324.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 85.5550 compared with its close of 85.7600 during the previous trading session.

MCX Gold futures for 5 August 2025 settlement gained 1.08% to Rs 97,111.

The US Dollar Index (DXY), which tracks the greenback's value against a basket of currencies, was down 0.30% to 96.20.

The United States 10-year bond yield lost 0.10% to 4.198.

In the commodities market, Brent crude for August 2025 settlement rose 8 cents or 0.12% to $66.82 a barrel.

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