Weekly Market Recap: Domestic Indices Slip Amid Global Uncertainty and Profit Booking

The Indian equity markets witnessed moderate losses during the week ending May 30, 2025.

The Indian equity markets witnessed moderate losses during the week ending May 30, 2025. Profit booking, global uncertainties, and investor caution ahead of key macroeconomic data led to a lackluster performance in frontline indices. The BSE Sensex dropped by 270.07 points (0.33 per cent) to close at 81,451.01, while the Nifty 50 fell by 102.45 points (0.41 per cent) to settle at 24,750.70. Despite this, broader market indices outperformed, with the BSE Mid-Cap rising 0.61 per cent and the BSE Small-Cap climbing 1.73 per cent, supported by strong domestic sentiment, a positive monsoon outlook, and improving inflation expectations.

The week started strong, with equity benchmarks surging on Monday and Thursday, boosted by the RBI’s record Rs 2.68 lakh crore dividend payout to the government. This payout eased fiscal deficit concerns and uplifted market confidence. However, profit booking set in from Tuesday, following mixed global cues and elevated valuations. Rising U.S. Treasury yields and trade tensions between the U.S. and EU further dampened investor sentiment. By Friday, markets declined again as traders awaited domestic GDP data.

In terms of the economy, India surpassed Japan to become the world’s fourth-largest economy, according to IMF data cited by NITI Aayog. Additionally, India’s GDP growth rose to a four-quarter high of 7.4 per cent in Q4 FY25, although annual growth moderated to 6.5 per cent. Industrial output growth slowed to 2.7 per cent in April, and foreign direct investment dropped 24.5 per cent year-on-year in Q4 FY25, reflecting ongoing global headwinds. However, the RBI’s annual report maintained a positive outlook for FY26, highlighting strong capital expenditure, easing inflation pressures, and robust financial system fundamentals.

The IMD projected above-normal rainfall during the 2025 monsoon season, with particularly favorable forecasts for Central and South India. This forecast further supported positive sentiment in mid and small-cap segments.

Among key stocks, Jio Financial Services rose on receiving SEBI approval for mutual fund operations via its joint venture with BlackRock. IndusInd Bank gained despite regulatory actions against senior executives in an insider trading case. NTPC and JSW Steel declined despite reporting profit growth, while Insecticides (India) rallied on strong Q4 performance. Global data, including cooling French inflation and improving German consumer sentiment, offered mixed signals for international investors.

Overall, while global concerns triggered some consolidation, domestic growth indicators, fiscal support, and monsoon optimism continued to support the broader market.

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