Markets Close Lower Amid Global Weakness; IT and Defence Stocks Under Pressure, Sensex declines by 271 points, Nifty by 74.35

Indian equity markets ended the session in negative territory on Monday, weighed down by weak global cues and profit-booking in key sectors. The BSE Sensex declined 271 points to close at 82,059.42, while the NSE Nifty slipped 74.35 points to settle at 24,945.45.

Global Sentiment Dampens Market Mood

Investor sentiment was subdued following Moody’s downgrade of the U.S. government’s credit rating, which led to a rise in U.S. Treasury yields and a sell-off in global equities. The ripple effect was felt across Asian and European markets, with Indian indices mirroring the cautious tone. 

Sectoral Performance: IT and Defence Stocks Decline

Information Technology stocks were among the top losers, reacting negatively to the U.S. credit downgrade. The Nifty IT index fell by 1.3%, with major players like Infosys and TCS witnessing declines.

Defence stocks, which had recently seen a rally, experienced profit-booking. Shares of Cochin Shipyard, Mazagon Dock, Hindustan Aeronautics Ltd (HAL), and Garden Reach Shipbuilders & Engineers (GRSE) slipped up to 4%. The pullback follows a surge driven by optimism over fresh orders and the success of Operation Sindoor. 

Stock Highlights

Delhivery shares jumped over 10.14% to ₹367.9 after the company reported a consolidated net profit of ₹73 crore for Q4 FY25, marking a turnaround from a net loss of ₹69 crore in the same period last year.

Virtual Galaxy Infotech debuted on the NSE SME platform with a 26.76% premium at ₹180, following an IPO that was subscribed over 200 times, driven by robust non-institutional interest.

Divi’s Laboratories reported a 26% year-on-year rise in net profit to ₹667 crore for Q4 FY25, compared to ₹531 crore in the same period last year, keeping the stock in focus.

Volatility Index and Market Breadth

The India VIX, a measure of market volatility, rose nearly 5%, indicating increased nervousness among investors. Despite the overall decline, the advance-decline ratio remained in favour of buyers, suggesting selective buying interest in certain segments. 

Outlook

Market participants are expected to remain cautious in the near term, closely monitoring global developments and their potential impact on domestic equities. The upcoming sessions may see continued volatility as investors assess the evolving macroeconomic landscape.

Current Market Update

• The Sensex is trading at 82,236.25 down by -94.34 points or -0.15%.
• The NSE Nifty 50 is trading at 24,986.05 down by -32.50 points or -0.13%.

Top 5 Gainers in the Market

Bajaj Auto (BAJAJ-AUTO)

• Opening Price: ₹8,500.00
• Current Market Price (LTP): ₹8,740.50
• Percentage Change: +3.04%
  Bajaj Auto led the gains, rising over 3%. The stock surged after the company reported robust monthly sales figures and positive management commentary on export growth and new product launches. Recent news highlights strong demand in both domestic and international markets, especially for premium and electric two-wheelers.

Eicher Motors (EICHERMOT)

• Opening Price: ₹5,510.00
• Current Market Price (LTP): ₹5,585.00
• Percentage Change: +1.37%
  Eicher Motors gained 1.37%, supported by sustained growth in Royal Enfield sales and optimism around new model launches. Analysts have cited the company's focus on premiumization and expanding its international footprint as key drivers.

Shriram Finance (SHRIRAMFIN)

• Opening Price: ₹670.00
• Current Market Price (LTP): ₹673.95
• Percentage Change: +1.27%
  Shriram Finance advanced 1.27% after reporting healthy loan growth and improved asset quality in its recent quarterly update. The company’s expansion in the retail lending segment and positive management outlook have further boosted investor sentiment.

Hero MotoCorp (HEROMOTOCO)

• Opening Price: ₹4,323.10
• Current Market Price (LTP): ₹4,399.60
• Percentage Change: +1.25%
  Hero MotoCorp rose 1.25% on the back of strong April sales and positive guidance for upcoming quarters. The company’s focus on premium motorcycles and electric vehicle launches has attracted investor interest.

Power Grid Corporation (POWERGRID)

• Opening Price: ₹302.00
• Current Market Price (LTP): ₹303.20
• Percentage Change: +0.86%
  Power Grid gained 0.86% as the company benefited from new project wins and expectations of increased government spending on power infrastructure. Recent analyst commentary highlights a robust order book and stable operational performance.

Top 5 Losers in the Market

Eternal (ETERNAL)

• Opening Price: ₹245.84
• Current Market Price (LTP): ₹241.40
• Percentage Change: -1.77%
  Eternal was the top loser, declining 1.77%. The drop is attributed to profit booking after a recent rally and subdued investor sentiment amid lack of fresh positive triggers. Recent sector commentary also notes increased volatility in midcap stock.

Infosys (INFY)

• Opening Price: ₹1,576.50
• Current Market Price (LTP): ₹1,565.70
• Percentage Change: -1.52%
  Infosys fell 1.52% following global IT sector weakness and concerns over delayed client spending. Analysts have highlighted cautious management commentary on revenue growth and persistent headwinds in key international markets.

Tata Consumer Products (TATACONSUM)

• Opening Price: ₹1,168.00
• Current Market Price (LTP): ₹1,153.10
• Percentage Change: -1.28%
  Tata Consumer Products declined 1.28% as rising input costs and subdued rural demand continued to pressure margins. Recent news also points to heightened competition in the FMCG sector impacting near-term earnings.

Dr. Reddy's Laboratories (DRREDDY)

• Opening Price: ₹1,228.30
• Current Market Price (LTP): ₹1,217.10
• Percentage Change: -1.11%
  Dr. Reddy's slipped 1.11%, with the decline linked to profit booking and regulatory concerns in key export markets. The pharmaceutical sector has also seen muted investor sentiment after a recent uptrend.

Tata Consultancy Services (TCS)

• Opening Price: ₹3,550.00
• Current Market Price (LTP): ₹3,523.80
• Percentage Change: -1.05%
  TCS dropped 1.05% as IT stocks faced pressure from weak global cues and a cautious outlook on client technology spending. Analysts have also cited delays in decision-making by major clients as a near-term headwind.

Market open 

Indian equity markets are expected to open on a cautious note today, after receiving soft global cues. Gift Nifty futures are slightly lower, indicating the possible subdued start of Dalal Street. Nifty is lower by 15 points, or 0.06%, at 25,074 on the NSE IX. This follows Indian markets finishing lower on Friday, driven by profit booking among heavyweight financial and IT stocks, even though midcap, smallcap, and rate-sensitive segments remained buoyant. The BSE Sensex dipped 200.15 points (0.24%) to 82,330.59, while the NSE Nifty lost 42.30 points (0.17%) to 25,019.80 at Friday's close. Despite Friday's decline, market sentiment was optimistic following a steep rally in the early part of the week on account of sustained strength in mid-cap, small-cap, and rate-sensitive segments such as realty, NBFCs, auto, and consumer durables.

Global Headwinds: US Credit Downgrade Weighs

Global sentiment turned guarded on account of Moody's Ratings' downgrade of the United States' long-term issuer and senior unsecured ratings from Aaa to Aa1 on Friday. This is the first time that the US has lost its premier credit rating from this institution. Moody's based its downgrade on increasing government debt and increasing interest expenses. Following this credit setback, Wall Street futures declined, the dollar weakened, and US Treasury yields increased. Higher bond yields can render fixed-income investments more appealing to foreign investors than equities, and this can hurt flows into emerging markets like India. The majority of Asian markets began Monday lower, with the MSCI Asia ex Japan index declining 0.7%. Geopolitical tensions and continued uncertainty over the US-China tariff war remain market caution factors. Gold prices have increased on Monday, up more than 1% as a weaker dollar combined with renewed threats of trade tariffs under the prior administration. Prices of oil are still relatively steady as investors watch for Iran-US talks on nuclear issues and for major economic reports from China.

Currency markets are expected to be under slight pressure given the global backdrop. Rupee closed at ₹85.583 per USD on 16th May (Friday). The Fed's indication of fewer rate cuts in 2025 has strengthened the US dollar, exerting downward pressure on emerging market currencies, including the rupee. Movements by FPIs, along with developments in India-US trade relations and recent US credit rating changes, are impacting investor sentiment and the rupee's trajectory.

Gold prices have experienced notable movements both globally and in India, influenced by various economic and geopolitical factors. Gold prices have increased by more than 1%. The growth came on the back of a softer dollar and fresh threats of trade tariffs. Spot gold rose 1.4% to $3,247.40 an ounce. 

Oil prices are relatively stable amid ongoing geopolitical developments and economic data releases. Investors watched Iran-US nuclear negotiations and waited for major Chinese economic reports. Brent crude fell 5 cents to $65.36 a barrel. Major oil companies are preparing for a potential prolonged period of lower prices. Firms like ExxonMobil and Chevron have emphasized fiscal resilience, with some reducing capital expenditures to maintain shareholder returns .

 Fund Flows & Market Commentary

Foreign Institutional Investors (FIIs) continued buying for the fifth week in a row, buying ₹15,925.4 crore worth of shares in the cash segment during the last week. Foreign portfolio investors have been buying in every week for the past five weeks. Domestic institutional investors (DIIs) were also net buyers, purchasing ₹9,557.1 crore worth of shares in the cash segment during the week.

Stock to watch 

Sun Pharma: The shares are likely to be in focus as the company has got US Food and Drug Administration (USFDA) approval for its next-generation BLU-U Blue Light Photodynamic Therapy (PDT) device for treatment of actinic keratosis.

Vodafone Idea: The embattled telecom operator's shares are in the limelight as the company has filed a petition in the Supreme Court challenging the government's denial of its application for waiver of more than $5 billion worth of interest and penalties on statutory dues.

Adani Defence & Aerospace: The firm has entered into a partnership arrangement with Sparton (part of the Elbit Systems group of companies) for localizing the manufacture of advanced electronic systems and sophisticated Anti-Submarine Warfare (ASW) solutions for Indian and international markets.

IFCI: The scrip will witness a bullish trend, having gained more than 15% on Friday and closing above the crucial resistance point of ₹48. Experts anticipate a further uptrend towards ₹57-59.

Other significant corporate news includes the Shapoorji Pallonji Group's appeal to the RBI for a three-year rollover to meet stricter capital adequacy guidelines for its subsidiary, Sterling Investment Corp. Non-banking financial institutions (NBFCs) are increasingly turning towards international markets for funds, since domestic banks have been hesitant to pass on the gains from the recent repo rate reduction.

Read More : Stocks to Watch Today, 19th May 2025

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