Indian Equity Benchmarks Dip as IT Sector Pullback Offsets Growth Optimism

By 12:07 p.m. IST, the Nifty 50 was down 0.37 per cent at 24,742, while the BSE Sensex declined 0.28 per cent to 81,395.

Market Update at 12:30 PM: Indian benchmark indices slipped on Friday, as losses in information technology stocks, triggered by renewed doubts over U.S. tariffs, offset positive sentiment ahead of key domestic growth data due later in the day.

By 12:07 p.m. IST, the Nifty 50 was down 0.37 per cent at 24,742, while the BSE Sensex declined 0.28 per cent to 81,395.

IT stocks, which earn a large share of their revenue from the U.S., dropped 1 per cent following a court decision to temporarily reinstate the broad tariffs imposed during President Donald Trump's administration. Earlier this week, a U.S. trade court had blocked these duties, citing executive overreach.

Eleven out of thirteen major sectors saw declines, with Small-Cap and Mid-Cap indices marginally increased by 0.04 per cent and 0.01 per cent, respectively.

So far in May, the Nifty has risen about 2 per cent, aiming for its third consecutive monthly gain, supported by strong institutional inflows and gradual improvement in corporate earnings that have helped the market navigate geopolitical and trade challenges.

Looking ahead, further gains will depend on corporate earnings performance, upcoming GDP figures, and the Reserve Bank of India's policy announcement next week, according to Rego.

India’s economic growth is likely to accelerate in the January–March quarter, driven by stronger rural demand and increased government spending, despite cautious private sector investment amid global uncertainties.

Among individual stocks, Bajaj Auto fell 2.3 per cent despite beating profit estimates for the March quarter, warning that delays in securing rare earth magnets from China could severely affect electric vehicle production by July. Meanwhile, Ola Electric dropped 6 per cent after projecting a revenue decline for the June quarter, following a wider loss in the previous quarter.

Market Update at 10:20 AM: Indian benchmark indices began Friday's session on a flat note, as weakness in IT stocks—triggered by concerns over U.S. tariff developments—balanced out the positive sentiment surrounding domestic growth ahead of key economic data.

As of 9:36 a.m. IST, the Nifty 50 edged down by 0.02 per cent to 24,829.65, while the BSE Sensex hovered near the previous close at 81,593.33.

The Nifty IT index declined by 1 per cent, reversing its prior day’s gain of 0.8 per cent, after a U.S. appeals court temporarily restored former President Donald Trump’s broad tariff measures. The sector had earlier rallied when a trade court ruled against the tariffs, citing executive overreach. Given that Indian IT firms rely heavily on the U.S. market, the uncertainty weighed on investor sentiment.

Despite the IT drag, most sectors traded in the green, with 10 out of 13 major sectoral indices advancing. Broader market indices also saw some upward momentum—small-cap stocks gained 0.3 per cent and mid-caps rose by 0.5 per cent.

Investor attention now turns to the release of India’s GDP figures post-market houRs Analysts expect an uptick in growth for the January–March quarter, likely driven by rural consumption and increased government expenditure, although private sector investments remain cautious amid global headwinds.

Pre-Market Update at 8:00 AM: On Friday, May 30, Indian equity markets are likely to begin trading on a cautious note. As of 7:25 am, the GIFT Nifty hovered around 24,944, marginally higher by 5 points compared to the previous session's close.

While Asian markets showed weakness, U.S. indices closed higher overnight, buoyed by a federal appeals court ruling reinstating tariffs introduced during former President Donald Trump’s administration.

With no major domestic developments to drive market sentiment, investors will closely monitor global cues and the performance of leading banking and financial stocks to determine the market’s near-term direction. Attention is also firmly fixed on India's GDP growth figures scheduled for release today.

Given this subdued start, trading activity in the domestic market is expected to be influenced more by stock-specific movements as Q4 earnings announcements roll out. Several notable companies including Bajaj Holdings & Investment, Apollo Hospitals, Vodafone Idea, Nykaa, Sun TV Network, and others are set to report their Quarterly Results.

On May 29, Foreign Institutional Investors remained net buyers, acquiring equities worth Rs 884.03 crore. Domestic Institutional Investors also continued their buying streak, purchasing shares valued at Rs 4,286.50 crore during the session. FIIs have been net purchasers over the past five trading days, while DIIs have maintained net buying over the last eight sessions.

Indian markets ended Thursday on a positive note, propelled by buying interest in select blue-chip stocks during the late houRs The Sensex gained 320.70 points (0.39 per cent) to close at 81,633.02, and the Nifty 50 rose by 81.15 points (0.33 per cent) to finish at 24,833.60.

Asian equities opened lower amid growing uncertainty tied to the ongoing legal developments regarding the U.S. tariffs imposed during Donald Trump’s presidency.

April’s economic data from Japan showed a mixed picture. Industrial output declined by 0.9 per cent month-on-month, though manufacturers expect a 9.0 per cent increase in May, followed by a 3.4 per cent drop in June. Retail sales rose 3.3 per cent year-over-year, slightly beating estimates, while unemployment held steady at 2.5 per cent, in line with forecasts.

U.S. markets closed higher on Thursday after a federal appeals court temporarily reinstated broad tariffs from the Trump era, halting a lower court ruling pending further review. The Dow Jones added 117.03 points (0.28 per cent) to 42,215.73, the S&P 500 rose 0.40 per cent to 5,912.17, and the Nasdaq gained 0.39 per cent to 19,175.87.

The U.S. economy contracted by 0.2 per cent annualised in Q1 2025, a smaller decline than initially estimated. This marks the first GDP contraction since 2022, following 2.4 per cent growth in Q4 2024.

WTI crude futures dropped toward USD 60.9 per barrel, while Brent crude fell near USD 63.3, signaling a potential second consecutive weekly loss ahead of the OPEC+ meeting. Gold prices edged down slightly in early Asian trade to USD 3,309 per ounce amid possible position adjustments but could find support from weaker U.S. labor data and the confirmed economic slowdown.

There are not any stocks banned for trading in the F&O segment today.

Disclaimer: The article is for informational purposes only and not investment advice.