Equities Slide, Rupee Weakens as Global Cues, Oil Prices Weigh On Sentiment

HIGHLIGHTS

• Shriram Properties jumps 12% as profit more than doubles, margins expand sharply
• IMD forecasts above normal rainfall for June at 108% of LPA
• Olectra Greentech tanks 14% as Maharashtra govt cancels ₹100 billion e-bus order
• Capacite Infra gains over 5% on rise in March quarter revenue, PAT
• Bondada Engineering gains 9% after ₹2.04 billion order win in Telangana

Indian equities ended lower after a volatile session that saw benchmark indices erase early gains, dragged down by sharp selling in auto, IT, and FMCG stocks. The Sensex swung nearly 1,300 points intraday, reflecting the tug-of-war between bulls and bears, before closing down 0.5%. The Nifty also snapped a two-day winning streak.

Despite the headline indices faltering, broader markets showed resilience. The Nifty Midcap 100 and Smallcap 100 rose 0.15% and 0.1%, respectively, indicating selective investor interest.

On the Nifty, Jio Financial Services, Indusind Bank, Sun Pharma, Trent, and Adani Ports led the gainers’ list, offering some support. Meanwhile, Ultratech Cement, ITC, JSW Steel, Tata Motors, and Axis Bank were among the top drags.

Sectoral Performance
Most sectoral indices ended in the red. Nifty FMCG, IT, and Auto indices declined over 1% each, reflecting profit-booking in recent outperformers. Financials also struggled, with Nifty Bank and Private Bank indices shedding about 0.7% each. Defensive segments such as pharma and energy saw modest losses, while PSU Bank, Realty, and Media indices registered slight gains, offering some cushion to the overall decline.

The India VIX jumped over 5.5%, signaling increased investor anxiety and heightened market volatility ahead of key macroeconomic data and the upcoming RBI policy decision. Overall, the session marked a pause in the recent recovery, with caution setting in across key sectors.

Top Gainers	% Change	Top Losers	% Change
NIFTY PSU BANK	0.26%	NIFTY FMCG	-0.88%
NIFTY REALTY	0.24%	NIFTY IT	-0.75%
NIFTY PHARMA	0.11%	NIFTY AUTO	-0.70%
		NIFTY FINANCIAL SERVICES	-0.64%
		NIFTY OIL & GAS	-0.58%

Indian government bond yields ended flat on Tuesday, as traders stayed on the sidelines ahead of key domestic triggers later this week. The yield on the benchmark 10-year gilts settled at 6.2032%, barely changed from Monday’s close of 6.2046%.

Market participants are now focused on two key events: the upcoming ₹300 billion auction of the 2035 benchmark bond on Friday, and the release of GDP data for the January–March quarter. The bond sale is expected to gauge investor appetite amid expectations of continued policy easing, while the growth data will offer insight into the underlying strength of the Indian economy.

According to a Reuters poll, India’s economy likely expanded by 6.7% in the March quarter, up from 6.2% in the previous three months. A stronger-than-expected print could temporarily push yields higher, but the broader outlook remains anchored by hopes of further monetary accommodation.

Attention will then shift to the Reserve Bank of India’s policy meeting on June 6. Markets widely expect the central bank to deliver a third straight rate cut of 25 basis points, supported by contained inflation and the RBI’s cautious macroeconomic stance.

Tenure	Today	Previous
10-year Gilt	6.20%	6.20%
5-year gilt	5.84%	5.85%
5-year OIS	5.62%	5.63%

The Indian rupee weakened on Tuesday, ending a two-day winning streak as month-end dollar demand from importers and a stronger US dollar pressured the local currency. The rupee closed at 85.34 against the greenback, down 25 paise from Monday’s close of 85.09.

Traders pointed to increased dollar demand from local importers, likely related to month-end payments, as a key driver of weakness. Additionally, a recovery in global crude oil prices and a dip in domestic equity markets added to the rupee's decline.

Regional currencies also lost ground, mirroring risk-off sentiment in Asian markets. The offshore Chinese yuan slipped 0.2%, while the Malaysian ringgit led losses with a nearly 0.5% drop. A broad retreat in Asian equities added to the regional currency pressure.

The US dollar gained ground against major currencies, with the dollar index rising 0.4% to 99.3. A spike in US Treasury yields, following a rally in Japanese government bonds on news that Japan may reduce super-long bond issuance, further strengthened the greenback.

Unit	Today	Previous
Dollar/Rupee	85.34	85.09
Dollar Index	99.16	98.94
1-year Dollar/rupee premium (%)	2.01%	2.03%

OUTLOOK
Equities may witness heightened volatility following Tuesday’s sharp swings and a setback in large-cap stocks. Sustained selling in FMCG, IT, and auto sectors could keep indices under pressure. Broader markets, having shown resilience, are expected to outperform headline indices in the near term. Elevated India VIX suggests that swings may persist as the June 4 election outcome nears. Stock-specific action may dominate as investors turn selective amid policy and earnings-related uncertainty.

In the bond market, benchmark 10-year yields may stay range-bound ahead of Friday’s GDP data and next week’s monetary policy decision. The yield, which closed at 6.2032%, is likely to move in a tight band as traders assess whether the RBI will continue its accommodative stance despite global fiscal concerns and sticky core inflation. 

The rupee is expected to remain under pressure amid persistent dollar demand from importers and global risk aversion. The greenback's recent rebound and firm US Treasury yields may limit rupee appreciation despite occasional support from soft crude and RBI’s intervention.

Key Events & Data Due Wednesday:

Economic Data

• India April Industrial Production data

Corporate Actions

• Jan-Mar earnings: 3M India, A2Z Infra Engineering, Aban Offshore, Avanti Feeds, Bannari Amman Sugars, Bata India, Cummins India LtdFinolex Cables, Himatsingka Seide, Hinduja Global Solutions, Hindustan Oil Exploration Company, Indian Railway Catering And Tourism Corp LtdJindal Photo, Khaitan (India), MMTC, Natco Pharma, National Fertilizers, National Highways Infra TrustNuvama Wealth Management, Omaxe, Steel Authority of India, Welspun Corp, Zodiac Clothing Company, 

Policy Events

• RBNZ Interest Rate Decision
• US Fed Governor Waller Speaks 
• US FOMC Member Kashkari Speaks 
• OPEC Meeting
• US FOMC Member Williams Speaks 
• US FOMC Meeting Minutes