Nifty and Sensex Retreat Amid Pharma Weakness

Ather Energy made its stock market debut, listing at a 2.18 per cent premium to its IPO price. The electric scooter company had recently completed a USD  352 million public offering, which was fully subscribed.

Market Update at 12:15 PM: India's key stock indices declined on Tuesday, with most sectors in the red, primarily due to a drop in pharma stocks triggered by U.S. manufacturing policy changes. This outweighed gains in Mahindra & Mahindra, which rose sharply on improved earnings expectations.

As of 12:00 p.m. IST, the Nifty 50 slipped 0.33 per cent to 24,381, while the BSE Sensex was down 0.29 per cent at 80,560. Losses were seen across 16 of the 17 major sectoral indices. Broader markets also came under pressure, with both the Small-Cap and Mid-Cap indices declining by 1 per cent each.

The auto sector index gained 1 per cent, supported by Mahindra & Mahindra’s 3.1 per cent rise, which led the Nifty 50 gainers.

On the other hand, pharma stocks fell 1.5 per cent after U.S. President Donald Trump signed an executive order to speed up the approval process for pharmaceutical manufacturing facilities in the U.S., potentially reducing the reliance on imports. This is significant as Indian pharma companies rely heavily on U.S. markets, which accounted for USD 8.73 billion, 31 per cent, of total pharma exports in FY24.

Financial stocks declined 0.7 per cent, and Reliance dipped 1.2 per cent after a recent rally over the past five sessions.

Meanwhile, Ather Energy made its stock market debut, listing at a 2.18 per cent premium to its IPO price. The electric scooter company had recently completed a USD  352 million public offering, which was fully subscribed.

IT firm Coforge rose 3.5 per cent even though its quarterly earnings missed expectations, as experts remained optimistic about its future earnings trajectory.

Market Update at 10:00 AM: India’s benchmark indices started Tuesday’s session on a flat note, with declines in pharmaceutical stocks counterbalancing gains in Mahindra & Mahindra. At 9:22 a.m. IST, the Nifty 50 was down 0.05 per cent at 24,447.85, while the BSE Sensex also slipped 0.05 per cent to 80,759.47.

Out of the 13 key sectoral indices, seven recorded gains, led by the auto index, which advanced 1 per cent. Mahindra & Mahindra rose 3.5 per cent, emerging as the top gainer on the Nifty 50. Several brokerages remain optimistic about the company’s earnings outlook, citing improved margins in its farm and auto divisions and sustained SUV demand.

On the other hand, the pharma index dropped 1.8 per cent following an executive order signed by U.S. President Donald Trump aimed at speeding up pharmaceutical plant approvals in the U.S., a move intended to encourage local drug manufacturing.

Electric scooter company Ather Energy) also drew investor attention ahead of its market debut, following a fully subscribed USD 352 million IPO.

Meanwhile, the small-cap and mid-cap indices, which are more focused on domestic markets, both declined by 0.4 per cent.

Pre-Market Update at 8:00 AM: Indian markets are likely to begin the day on a cautious note, as suggested by early trends in Gift Nifty, which was trading near 24,562 at 7:40 am—just about a point above the previous Nifty futures close. This indicates a flat-to-positive opening for domestic equities.

Investors are closely watching the US Federal Reserve’s upcoming monetary policy decision on Wednesday. The Fed is widely anticipated to maintain current interest rates. As per LSEG data, markets are factoring in a total of around 75 basis points of rate reductions in 2025, with the first potential cut of 25 basis points expected as early as the July meeting.

Overnight, U.S. markets ended lower, snapping the S&P 500’s longest winning streak in two decades. The Dow Jones slipped 98.60 points (0.24 per cent) to 41,218.83, the S&P 500 fell by 36.29 points (0.64 per cent) to 5,650.38, and the Nasdaq dropped 133.49 points (0.74 per cent) to 17,844.24. The declines came as investors responded to fresh tariff comments by former President Donald Trump and awaited the Federal Reserve’s policy stance.

Asian markets showed little movement in early hours. The Hang Seng Index was marginally higher by 0.38 per cent, but markets in Japan and South Korea were shut due to national holidays, resulting in muted regional activity.

Gold prices edged higher, touching a one-week peak amid rising demand for safe-haven assets in response to global trade uncertainties. Spot gold hovered around USD 3,330.16. Crude oil prices stabilised after a steep fall in the previous session, with Brent trading at USD 60.83 per barrel (up 1 per cent) and WTI at USD 57.69 (up 0.98 per cent).

On the domestic front, foreign institutional investors (FIIs) net bought shares worth Rs 497.79 crore on May 05, while domestic institutional investors (DIIs) were more aggressive, buying Rs 2,788.66 crore worth of equities.

For today, RBL Bank and Mannapuram Finance continue to remain under the F&O ban list.

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