Markets Tumble Amid Global Fiscal Concerns and Sectoral Weakness

Benchmarks Slide on Global Cues

On Thursday, May 22, 2025, Indian equity markets witnessed a significant downturn, with the BSE Sensex falling 644.64 points to close at 80,951.99, and the NSE Nifty declining by 203.75 points to settle at 24,609.70. This decline was primarily driven by negative global cues, including concerns over U.S. fiscal policy and rising Treasury yields.

Sectoral Performance: Broad-Based Losses

All major sectoral indices ended in the red. The Nifty Bank (-0.58%), Auto (-1.01%), FMCG (-1.44%), IT (-1.31%), Pharma (-0.93%), Consumer Durables (-1.14%), and Oil & Gas (-1.17%) sectors registered losses. In the broader market, the Nifty Midcap index dipped 0.35%, while the Nifty Smallcap posted a modest gain of 0.1%.

Key Stock Movements

ONGC: Shares declined over 2.65% following a 35% year-on-year drop in Q4 profit after tax.
M&M: The stock fell by 2.42%, impacted by profit booking and concerns over slowing rural demand.
Nalco: Shares surged over 1.74% after Q4 profit doubled to ₹2,067 crore, driven by strong aluminium prices. 

Global Influences and Currency Impact

Investor sentiment was dampened by global factors, notably the approval of a substantial U.S. tax and spending bill expected to add $3.8 trillion to the national debt. This development led to an 18-month high in U.S. Treasury yields, making American assets more attractive and prompting capital outflows from emerging markets like India.

The Indian rupee also felt the pressure, hitting a one-month low at 86.0025 against the U.S. dollar, breaching key support levels due to equity outflows and increased dollar demand from banks.

Outlook

The current market volatility underscores the sensitivity of Indian equities to global economic developments. Investors are advised to monitor international fiscal policies and currency movements closely, as these factors continue to influence domestic market dynamics.

Current Market Update

• The Sensex is trading at 80,812.36 down by 780.78 points or 0.96%.
• The NSE Nifty 50 is trading at 24,594.25 down by 222.35 points or 0.9%.

Top 5 Gainers in the Market

• Tata Steel (TATASTEEL)

• Opening Price: ₹160.98
• Current Market Price (LTP): ₹162.69
• Percentage Change: +0.65%

Tata Steel gained on optimism about global steel demand, supported by positive cues from Chinese stimulus measures and robust quarterly results. Recent news highlights improved realizations and volume growth in the sector.

• Bharti Airtel (BHARTIARTL)

• Opening Price: ₹1,819.90
• Current Market Price (LTP): ₹1,832.70
• Percentage Change: +0.56%

Bharti Airtel advanced due to strong subscriber additions and positive management commentary on ARPU (average revenue per user) growth. The telecom sector is also benefiting from increased data usage and stable competitive dynamics.

• Jio Financial Services (JIOFIN)

• Opening Price: ₹274.45
• Current Market Price (LTP): ₹275.55
• Percentage Change: +0.44%

Jio Financial Services rose following positive investor sentiment around its digital lending initiatives and recent partnerships in the fintech space. The company’s expansion in retail financial services has attracted renewed buying interest.

• IndusInd Bank (INDUSINDBK)

• Opening Price: ₹750.00
• Current Market Price (LTP): ₹772.75
• Percentage Change: +0.36%

IndusInd Bank edged higher as investors responded positively to improved asset quality metrics in its latest quarterly update and expectations of steady loan growth in the coming quarters.

• Dr. Reddy's Laboratories (DRREDDY)

• Opening Price: ₹1,224.70
• Current Market Price (LTP): ₹1,225.60
• Percentage Change: +0.07%

Dr. Reddy’s saw marginal gains after receiving regulatory approvals for new products in the US and Europe, and as investors sought defensives amid global market volatility.

Top 5 Losers in the Market

• M&M (Mahindra & Mahindra)

• Opening Price: ₹3,076.60
• Current Market Price (LTP): ₹3,012.70
• Percentage Change: -2.52%

M&M shares fell sharply due to profit booking after a recent rally and concerns over slowing rural demand and rising input costs, which are impacting margins in the auto sector. Broader market weakness also contributed to the decline.

• Power Grid Corporation (POWERGRID)

• Opening Price: ₹295.90
• Current Market Price (LTP): ₹289.15
• Percentage Change: -2.36%

Power Grid declined as investors reacted to muted growth in transmission revenues and rising operational costs. The sector is also facing regulatory uncertainties and broader market volatility.

• Tata Motors (TATAMOTORS)

• Opening Price: ₹725.00
• Current Market Price (LTP): ₹712.75
• Percentage Change: -1.93%

Tata Motors dropped on profit booking and concerns about margin pressures from higher input costs. There is also cautious sentiment ahead of upcoming quarterly results and global demand uncertainties in the auto sector.

• ITC

• Opening Price: ₹433.00
• Current Market Price (LTP): ₹424.70
• Percentage Change: -1.92%

ITC shares declined as the FMCG sector faced profit booking and worries over subdued rural demand and rising competition, which could impact near-term earnings.

• Bajaj Auto (BAJAJ-AUTO)

• Opening Price: ₹8,660.00
• Current Market Price (LTP): ₹8,527.00
• Percentage Change: -1.85%

Bajaj Auto slipped following weaker-than-expected sales data and concerns over export market growth. The two-wheeler segment is also experiencing margin pressures due to increased input costs.

The Indian market opened on a guarded note with both the Sensex and the NIFTY opening in the red. NIFTY at 9:15 am was 80 points down, trading at 24734. Sensex at the same time was 275 points down at 81233.

Global Cues: Asian markets are down, reflecting losses on Wall Street on fears of increasing U.S. Treasury yields and fiscal policy discussions. Nifty rallied on Wednesday, ending a 3-day losing run, but Thursday might see Bears regain control on the back of global weakness, US debt worries, surging Covid-19 cases, and overbought technicals.

Sectoral Focus: Banking and financial stocks continue to be in focus, with foreign investors taking a liking to the BFSI space.

Corporate Results: ITC, Sun Pharma, and IndiGo are among the companies that will declare their Q4 results today, and hence may have an impact on sentiment.

Commodity Watch

Crude oil prices are going down because of worries of rising U.S. stockpiles and general market sell-offs. Crude Oil PricesWTI Crude Oil (West Texas Intermediate): $61.57 per barrel Brent Crude Oil: $64.88 per barrel. These levels mark a further fall, driven by concerns of an oversupplied market amid rising U.S. crude inventories and a wider pullback in financial markets.

Gold prices have seen a significant rise both in India and internationally, on account of investor apprehension due to increased U.S. debt worries and a falling U.S. dollar. Indian Gold Price(per 10 grams)Purity Price (₹)24 Carat 95,300 and 22 Carat 94,920

USD/INR is around ₹85.64 per dollar, which shows the rupee has appreciated ever so slightly over yesterday's rate of ₹85.60. Current Rate: ₹85.64 per USD, Previous Close: ₹85.60 per USD, Day's Range seen: ₹85.60 – ₹85.66. The rupee's slight appreciation is due to U.S. Fiscal Worries. Investor wariness in the wake of increasing U.S. debt and lackluster demand for U.S. Treasury bonds has caused the value of the U.S. dollar to decrease.

Stocks in Focus

• IndiGo: IndiGo posted a 62% YoY jump in Q4 FY25 profit to over ₹3,067 crore, with revenue up 24.8% and fewer grounded planes.
  
  
• IndusInd Bank: IndusInd Bank reported a net loss exceeding ₹2,200 crore in Q4 FY25 due to falling interest income, worsening asset quality, and suspected accounting fraud.
  
  
• Oil India: Oil India’s Q4 FY25 net profit declined 22% YoY to ₹1,591.5 crore.
  
  
• ONGC: ONGC’s Q4 FY25 profit dropped 22% YoY to ₹6,448 crore, missing estimates despite a 4% revenue rise.
  
  
• Mankind Pharma: Mankind Pharma saw its Q4 FY25 profit fall 10–11% YoY despite a 27% surge in revenue.
  
  
• RVNL: RVNL reported a 4% YoY drop in Q4 profit to ₹459 crore and declared a final dividend of ₹1.72 per share.
  
  
• Colgate-Palmolive: Colgate-Palmolive’s Q4 FY25 profit fell 6.5% YoY to ₹355 crore, missing analyst expectations.
  
  
• Nalco: Nalco’s Q4 FY25 profit nearly doubled YoY to ₹2,067.23 crore due to higher operational revenue.
  
  
• IRCON International: IRCON posted a Q4 FY25 profit of ₹212 crore, down from ₹247 crore YoY.
  
  
• ITC: ITC increased its stake in Mother Sparsh to 39.47% with a ₹50.6 crore investment.
  
  
• Aditya Birla Fashion and Retail Limited (ABFRL): ABFRL’s lifestyle segment will see activity as May 22 is set as the record date.
   
• Havells India: Havells India entered the EV charging space with plans to launch chargers by Q3 FY26, investing ₹7–10 crore.
  
  
• REC: REC launched three new wholly-owned subsidiaries to expand in the power transmission sector.
  
  

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