Indian equity benchmarks declined as investors continued to lock in profits from recent outperformers, particularly in the information technology sector.
The NSE Nifty 50 Index slipped 0.3% in Mumbai, marking its second consecutive day of losses. Meanwhile, gains in small- and mid-cap indices were trimmed, though real estate stocks stood out as top performers.
The broader market mirrored the weakness seen across most Asian indices, as investor sentiment was dampened by Moody’s downgrade of the U.S. credit rating. The MSCI Asia Pacific Index edged down 0.1%, heading for its third straight daily decline.
Among the Nifty 50 constituents, software giant Infosys had the largest negative impact on the index, falling 1.9%. Of the 50 stocks in the index, 19 advanced while 31 declined.
APL Apollo Tubes Ltd. and BSE Ltd. were among the NSE 200 constituents that reached record highs in today’s session. Additionally, one more stock climbed to a new 52-week high, while Vodafone Idea Ltd. touched a 52-week low.
Notably, among the stocks hitting fresh highs, BSE Ltd. has delivered the strongest average 3-month return historically when bought at a new 52-week high.
The NSE Nifty 50 Index declined by 1.1% marking its steepest single-day drop in a week, with 43 of its 50 constituents closing lower. Broader market indices also mirrored the weakness, as both mid-cap and small-cap gauges fell by over 1%.
Indian equities began the week on a cautious note following a strong 4% gain last week. Foreign institutional investors (FIIs) net sold ₹5.3 billion ($62 million) worth of domestic equities on Monday, while domestic institutional investors (DIIs) also trimmed positions, offloading ₹2.4 billion, according to provisional data. Local funds, which have been a stabilizing force for the market, appear to be booking profits in recent sessions.
HDFC Bank Ltd. was the biggest drag on the Nifty 50, slipping 1.26% and contributing the most to the index’s decline.
According to a note from analysts at brokerage firm Elara Capital, companies in the National Stock Exchange’s Nifty Midcap 150 Index recorded a 21.4% year-over-year increase in profits for the fourth quarter—substantially higher than the 4.3% growth seen among Nifty 50 Index constituents. The analysts attribute this outperformance to the resilience of smaller, more domestically focused firms, which are navigating the global trade tensions more effectively than their larger counterparts.
Forward-looking earnings projections reflect this trend. The 12-month forward earnings estimate for the midcap index has risen by over 13% so far this year, while estimates for the Nifty 50 have remained flat, based on Bloomberg data.
These developments suggest that India’s corporate earnings base is broadening. Additionally, the traditionally higher risk premium associated with smaller-cap stocks appears to be narrowing, indicating growing investor confidence. This shift reinforces the view that Indian companies—particularly those outside the large-cap space—are addressing long-standing inefficiencies and becoming more profit-oriented.
“Midcap earnings outpacing those of larger firms lays the groundwork for substantial wealth creation, especially among smaller, government-affiliated companies,” noted Sumeet Rohra, fund manager at Smartsun Capital Pte. in Singapore. “In many cases, these entities are being managed more effectively than some private-sector peers.”
NSE Nears IPO After SEBI Settlement Proposal
The National Stock Exchange (NSE) appears closer than ever to reviving its long-delayed IPO, which has been on hold for nearly a decade. NSE has proposed a record ₹10 billion ($118 million) settlement to the Securities and Exchange Board of India (SEBI) to resolve a long-standing regulatory issue. Sources suggest SEBI is inclined to accept the offer, which would clear the final obstacle to NSE securing a no-objection certificate required for listing. Meanwhile, investor enthusiasm remains strong—NSE’s private market valuation has surged from $36 billion in September to $50 billion, as highlighted in a LinkedIn post by U.S.-based Drew Investments.
NSE Targets BSE in Expiry Day Face-Off
India’s two largest stock exchanges are set to compete more directly as NSE plans to shift its derivatives contract expiry day from Thursday to Tuesday, according to sources. This strategic move targets BSE Ltd., which already uses Tuesday for expiries. The change aligns with SEBI’s new directive limiting expiry days to either Tuesday or Thursday to control excessive speculative activity. With both exchanges now likely to clash on the same day, a tighter battle for futures and options (F&O) market share is anticipated.
Defense Sector Valuations Remain Justified: IIFL
The Nifty India Defence Index reached an all-time high on Monday, prompting some concerns over rich valuations. However, IIFL analysts believe the sector will continue to outperform, supported by robust order pipelines and strong investor sentiment. They point to both rising domestic defense budgets and expanding global spending, which enhances export opportunities for Indian defense firms. Among state-owned entities, Bharat Electronics stands out as IIFL’s top recommendation due to its consistent execution track record.
Adani Ports Plans Record Bond Sale; FMCG Stocks Decline
Adani Ports and SEZ Ltd. (ADSEZ) +0.8%
Adani Ports is planning a record bond issuance worth ₹50 billion to fund its capital expenditure program.
Market Decliners
ITC Ltd. fell 3.2%
Bajaj Auto Ltd. (BJAUT) declined 1.7% ahead of its earnings release; the stock is up 0.8% year-to-date
Nestlé India Ltd. (NEST) dropped 1.6%
Market Insights
8 of the 15 sector indices on BSE Ltd. ended in the red
NSE Nifty Media Index was the top-performing sector
NSE Nifty FMCG Index posted the steepest decline
MSCI AC Asia Pacific Index dropped 0.5%
NSE Nifty 50 is up 4.7% YTD, trailing the MSCI AC Asia Pacific Index, which is up 7.3%
Nifty 50 constituents are currently trading at 20.5x forward 12-month earnings estimates
Indian Equities Extend Monthly Gains Amid Strong Foreign Inflows and Robust GDP Data
Indian equities posted gains for the third consecutive month, supported by the highest level of foreign inflows in eight months and improved corporate earnings performance.
The NSE Nifty 50 Index declined 0.3% on Friday, trimming its monthly gain to 1.7%, while the BSE Sensex closed the month 1.5% higher. Of the 50 Nifty constituents, only seven advanced, with the remaining 43 recording declines.
Foreign institutional investors (FIIs) purchased $2.5 billion worth of Indian equities in May (as of May 28), lifting total net inflows for the quarter to $3.8 billion.
Sentiment may improve further on Monday after data released post-market showed India’s GDP grew 7.4% in the previous quarter, outpacing the 6.8% median estimate from a Bloomberg economist survey.
11 out of 15 BSE sector indices ended lower
The NSE Nifty PSU Bank Index outperformed all sectors
The NSE Nifty Metal Index was the worst performer
The MSCI AC Asia Pacific Index rose 1.1% over the same period
Valuations and YTD Performance:
The NSE Nifty 50 has returned 4.7% YTD, compared to an 8.3% gain for the MSCI AC Asia Pacific Index
Nifty 50 constituents are currently trading at 20.5x forward 12-month earnings estimates
Indian Equities Dip for Second Straight Session; Metals and Financials Weigh on Sentiment
Indian stocks extended losses for a second consecutive session, dragged lower by weakness in information technology and financial services sectors. The NSE Nifty 50 Index edged down 0.1% to 24,716.60, with the BSE SENSEX posting a similar decline. Despite the drop, Indian equities outperformed broader Asian markets, as the MSCI Asia Pacific Index fell 0.7%.
Reliance Industries was among the biggest drags on the benchmark index. Shares of metal producers also came under pressure after former U.S. President Donald Trump announced plans to increase tariffs on steel and aluminum imports. The Nifty Metal Index dropped 0.7%, marking the worst performance among the 15 sectoral indices.
In contrast, domestically oriented stocks showed resilience. The Nifty Smallcap 250 Index rose 0.7%, outperforming the Nifty 50 by the widest margin since May 19, following stronger-than-expected Q4 GDP data that beat economists’ consensus.
HDFC Bank was the single largest negative contributor to the Nifty 50, sliding 0.7%. Within the benchmark index, 20 stocks advanced while 30 ended in the red.
Indian Equities Close Flat as Tech Gains Offset Banking Losses
Indian equities ended broadly unchanged on the day, with strength in software exporters balancing out weakness in banking stocks. The NSE Nifty 50 Index held steady at 25,104.25, while the BSE SENSEX slipped 0.1%.
Among sectoral indices, the Nifty IT index outperformed, rising 1.7% — the best showing among the NSE’s 15 sectors. A technical indicator added to the positive sentiment, with the Nifty 50’s 50-day moving average crossing above the 200-day average, forming a “golden cross,” a bullish signal suggesting potential upside.
In the broader market, the Nifty Midcap 150 and Nifty Smallcap 250 have reached their most overbought levels in over a year, based on their 14-day Relative Strength Index (RSI).
Within the Nifty 50 basket, 26 stocks advanced while 24 declined.
Top Gainers:
Grasim Industries (GRASIM): +3.7%; momentum driven by bullish options activity and market commentary highlighting its “formidable” outlook.
Dr. Reddy’s Laboratories (DRRD): +2.1%
Tech Mahindra (TECHM): +2%
Top Losers:
Trent Ltd. (TRENT): -1.6%
Maruti Suzuki (MSIL): -1.3%; following a Reuters report indicating a two-thirds cut to its H1 e-Vitara production target.
Bajaj Finance (BAF): -1.1%
Indian equities extended their winning streak to a sixth consecutive session, buoyed by strong performances from heavyweight stocks Infosys and Reliance Industries, alongside positive cues from broader Asian markets.
The NSE Nifty 50 Index edged up 0.2% to 25,141.40, while the BSE SENSEX posted a similar gain. Infosys was the top contributor to the Nifty’s advance, rising 2.2%, followed by a 0.7% increase in Reliance Industries.
Investor sentiment was further lifted by regional market strength, as Asian stocks climbed on optimism over easing U.S.-China trade tensions, with both nations reportedly agreeing on a preliminary framework to de-escalate disputes. The MSCI Asia Pacific Index gained 0.3%, while the broader MSCI AC Asia Pacific Index rose 0.4%.
Despite overall gains, breadth was mixed: eight of the 15 sectoral indices on BSE ended lower. The NSE Nifty IT Index led gains, whereas the NSE Nifty PSU Bank Index was the worst performer.
Key metrics:
The NSE Nifty 50 is up 6.3% year-to-date, compared to a 10% gain in the MSCI AC Asia Pacific Index.
Nifty 50 constituents are currently trading at 20.7 times forward 12-month earnings estimates, suggesting moderately stretched valuations relative to historical averages.
The NSE Nifty 50 Index declined by 1% to close at 24,888.20 in Mumbai, marking its sharpest drop since May 20. This downturn follows a modest 0.1% gain in the previous session.
Larsen & Toubro Ltd. was the biggest drag on the index, falling 2.2%, while Tata Motors Ltd. recorded the steepest individual loss, sliding 2.9%.
Overall, 43 of the 50 index constituents ended the day in negative territory, with only 7 posting gains.
The NSE Nifty 50 Index declined for a second straight session, shedding 0.7% (169.6 points) to close at 24,718.60 in Mumbai — marking its lowest closing level since June 4.
HDFC Bank Ltd. was the largest contributor to the index’s decline, falling 1.3%, while State Bank of India registered the steepest loss among constituents, dropping 1.7%.
In total, 41 of the 50 index components ended the day in the red, while only 9 advanced.