Nifty Slips for Second Day in a Row; Small-caps Outshine with Over 1 Per Cent Gains
The Nifty 50 settled 34.10 points or 0.14 per cent lower at 24,716.60, bouncing back above its 20-day moving average. The Sensex also slipped slightly, down 77.26 points or 0.09 per cent, closing at 81,373.75.
Market Update at 4:00 PM: On June 2, Indian equity benchmarks ended in the red for a second straight session. Despite opening weak, the indices managed to recover from the day’s low and erased most losses by the close. The Nifty 50 settled 34.10 points or 0.14 per cent lower at 24,716.60, bouncing back above its 20-day moving average. The Sensex also slipped slightly, down 77.26 points or 0.09 per cent, closing at 81,373.75.
Manufacturing data indicated a slowdown in factory activity for May. The HSBC Purchasing Managers’ Index (PMI) eased to 57.6 from 58.2 in April—its weakest in three months. Though still comfortably above the long-term average of 54.1 and the 50.0 expansion threshold, output growth faced pressure from rising input costs, competitive intensity, and geopolitical uncertainties, including India-Pakistan tensions.
Sectorally, the Realty index stood out with a 2.31 per cent jump, led by Brigade Enterprises, which soared over 7.4 per cent. PSU banks also witnessed a strong session, with the Nifty PSU Bank index climbing 2.15 per cent on stock-specific momentum. In total, nine of the 13 NSE sectoral indices ended higher, contributing to the broader market’s outperformance.
The Nifty Midcap 100 advanced by 0.62 per cent, while the Nifty Smallcap 100 surged 1.19 per cent, showing resilience compared to Large-Cap peers.
Top index gainers included Mahindra & Mahindra (+12.76 pts), ICICI Bank (+8.88 pts), and Adani Ports (+6.87 pts).
Major drags came from HDFC Bank (-15.25 pts), Infosys (-8.85 pts), and Reliance Industries (-6.75 pts).
Out of 3,014 stocks traded on the NSE, 1,529 closed higher, 1,402 ended lower, and 83 remained unchanged.
There were 68 stocks hitting 52-week highs, 38 touching 52-week lows, and circuit filters triggered on 109 stocks at the upper end and 103 at the lower end.
Market Update at 12:30 PM: On June 2, Indian equity markets opened lower, with major indices declining due to renewed concerns over U.S. trade policies, despite strong domestic economic data. The Nifty 50 slipped 0.65 per cent to 24,588.50, while the Sensex fell 0.72 per cent to 80,865.54 by 10:08 a.m. IST. Investor sentiment was hit after U.S. President Donald Trump proposed increasing tariffs on imported steel and aluminium to 50 per cent starting June 4, stoking fears of escalating U.S.-China trade tensions.
Sector-wise, the Nifty Metal index was down 0.7 per cent, and the Nifty IT index fell 1 per cent amid concerns about exposure to U.S. markets. Market breadth remained weak with eight of 13 sectoral indices in the red. Heavyweights like HDFC Bank and Reliance Industries dropped 1.5 per cent each, while ICICI Bank declined 0.8 per cent, pulling the broader market down.
Among stocks, Mphasis declined 3.1 per cent after reports suggested the loss of a key client, FedEx, which contributed 8 per cent of its revenue. Niva Bupa Health Insurance plummeted 11 per cent following a USD 126 million block deal executed at an 11 per cent discount. In contrast, Apollo Hospitals rose 2.5 per cent on strong Q4 earnings, and AstraZeneca Pharma India surged 8.7 per cent after posting a significant profit jump.
Despite the fall in headline indices, Small-Cap and Mid-Cap stocks saw some recovery, each gaining about 0.4 per cent. Meanwhile, newly listed Schloss Bangalore, the parent of luxury hotel chain "The Leela", opened 6.7 per cent lower on debut.
Market Update at 10:20 AM: Indian equity markets began the week on a weaker note, with declines in metal and IT stocks outweighing the positive sentiment from strong domestic GDP data. As of 9:25 a.m. IST on Monday, the Nifty 50 had slipped 0.82 per cent to 24,554.05, while the BSE Sensex dropped 0.89 per cent to 80,729.25.
Investor concerns were reignited globally after former U.S. President Donald Trump announced a potential hike in tariffs on imported steel and aluminium to 50 per cent, effective June 4. This triggered a sharp reaction in metal stocks, with the Nifty Metal index falling by 1.4 per cent, marking the steepest sectoral decline. IT stocks, with significant exposure to U.S. markets, also took a hit, falling 1.25 per cent.
Overall market sentiment remained subdued, as 10 out of 13 major sectoral indices traded in negative territory. Both small-cap and mid-cap indices registered a 0.3 per cent decline. These declines came despite encouraging economic data released on Friday, which showed India's GDP grew by 7.4 per cent in the January–March quarter, primarily supported by strong performance in the construction and manufacturing sectors.
Pre-Market Update at 8:00 AM: Indian equity markets are expected to kick off the trading week on a strong note, with the GIFT Nifty indicating a slightly positive opening. As of 7:21 am on Monday, June 2, the GIFT Nifty hovered around 24,851, marking a 15-point rise from the previous session’s close. However, sentiment across Asian markets turned cautious, taking cues from the decline in US stock futures. This pullback comes after a robust May where the S&P 500 and Nasdaq posted their highest monthly gains since November 2023.
In the week ahead, investors are likely to track multiple domestic and global developments. These include the Reserve Bank of India’s Monetary Policy Committee (MPC) decision, foreign capital flows, trade cues, automobile sales figures, and major economic data.
India's economy grew by 7.4 per cent during the January–March quarter of FY25, slowing from 8.4 per cent during the same period last year. This contributed to a full-year GDP growth of 6.5 per cent for FY25.
On the fiscal side, the government recorded a deficit of Rs 15.77 lakh crore for FY25, slightly above the target of Rs 15.70 lakh crore but an improvement over the Rs 16.54 lakh crore shortfall in FY24. The government has projected a reduction in fiscal deficit to 4.8 per cent of GDP in FY25 and further to 4.4 per cent in FY26.
GST collections remained solid, with May reporting Rs 2.01 lakh crore—an increase of 16.4 per cent year-on-year. This follows the record Rs 2.37 lakh crore collected in April.
On May 30, Foreign Institutional Investors (FIIs) turned net sellers, pulling out Rs 6,449.74 crore from equities. Meanwhile, Domestic Institutional Investors (DIIs) remained net buyers, purchasing stocks worth Rs 9,095.91 crore. DIIs have been consistently buying over the past nine sessions, providing some support to the market.
Despite ending Friday in the red, both the Nifty 50 and Sensex posted monthly gains for May. The Nifty 50 closed 82.90 points lower at 24,750.70, while the Sensex dropped 182.01 points to 81,451.01. The Nifty gained 1.7 per cent in May, marking its third consecutive month of positive returns.
Asian equities opened lower on Monday amid global trade concerns after US President Donald Trump announced that steel import tariffs would double to 50 per cent, effective June 4. This development comes amid broader trade policy shifts and geopolitical uncertainty.
On Wall Street, Friday's session ended with mixed results. The Dow Jones rose marginally by 54.34 points to 42,270.07, while the S&P 500 edged down slightly by 0.48 points to 5,911.69. The Nasdaq dropped 62.11 points to settle at 19,113.77. For May, the S&P 500 gained 6.2 per cent, and the Nasdaq rose by 9.6 per cent.
US inflation data, as reflected in the Personal Consumption Expenditures (PCE) Price Index, showed a minimal 0.1 per cent rise in April. The annual increase was 2.1 per cent, down from 2.3 per cent in March. The core PCE index, excluding food and energy, also posted a 0.1 per cent uptick.
Crude oil saw notable gains driven by geopolitical tensions and trade concerns. A restrained production hike by OPEC added to the upward momentum. Brent crude rose by 2.09 per cent to USD 64.09 per barrel, while US WTI futures climbed 2.30 per cent to USD 62.19 per barrel.
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Disclaimer: The article is for informational purposes only and not investment advice.