HIGHLIGHTS

• Bajaj Finance tanks over 5% on moderation in FY26 guidance
• SEBI's Tuhin Kanta Pandey warns investors to be 'watchful' of SME IPOs
• UBS upgrades rating on India to 'neutral', says 'still prefer China'
• SBI shares fall 3% ahead of earnings on Saturday
• Greaves Cotton shares jump 4% on strong March quarter earnings

Indian equity benchmarks ended Tuesday's session on a flat note after a day of volatile trading, as investor sentiment was weighed down by renewed geopolitical tensions with Pakistan and a disappointing outlook from heavyweight Bajaj Finance. The Sensex and Nifty 50 moved in a narrow range, reflecting caution across sectors.

Financial stocks led the day's decline, with Bajaj Finance plunging nearly 5% following weaker-than-expected quarterly numbers and a downward revision in its 2025-26 guidance. The company now projects 24–25% growth in assets under management, down from its earlier estimate of 25–27%, raising concerns about the near-term growth outlook for the broader financial sector.

SECTORAL PERFORMANCE 
After a strong two-day rally, defence stocks faced profit-booking. Hindustan Aeronautics Ltd slipped almost 3%, while Bharat Electronics Ltd shed over 1%, putting the brakes on recent gains in defence counters that had surged amid expectations of higher government spending.

In contrast, tyre stocks rallied on a bullish industry view. Ceat Ltd surged over 9%, supported by upbeat expectations for volume growth and margin expansion. The real estate sector also saw firm buying, led by Macrotech Developers and Godrej Properties, which gained over 3% each, driven by optimism around strong demand and positive pre-sales guidance.

Top Gainers	% Change	Top Losers	% Change
NIFTY REALTY	1.91%	NIFTY PSU BANK	-2.23%
NIFTY PHARMA	0.44%	NIFTY MEDIA	-2.18%
NIFTY HEALTHCARE INDEX	0.44%	NIFTY CONSUMER DURABLES	-0.88%
NIFTY AUTO	0.04%	NIFTY BANK	-0.55%
		NIFTY IT	-0.35%

Indian government bond yields ended steady on Tuesday, but marked their sharpest monthly decline since March 2020, reflecting a growing dovish tilt in the Reserve Bank of India’s monetary policy approach. The benchmark 10-year gilts yield closed flat on the day but dropped 22 basis points over April, following a 15 bps fall in March.

This consistent decline in yields signals increased investor confidence in the RBI’s supportive policy stance. Earlier in April, the central bank cut the repo rate by 25 basis points for the second time this calendar year, shifting its monetary stance from “neutral” to “accommodative” to bolster economic growth amid lingering global uncertainties.

In addition to the rate cuts, the RBI reinforced its commitment to ensuring market liquidity by stepping up bond purchases. The central bank conducted open market operations worth ₹1.20 trillion during April. Even before the final tranche of April’s bond buying was completed, it announced a fresh ₹1.25 trillion purchase programme for May, indicating sustained support for the bond market.

Tenure	Today	Previous
10-year Gilt	6.36%	6.34%
5-year gilt	6.08%	6.08%
5-year OIS	5.62%	5.65%

The Indian rupee appreciated sharply today, rising 0.9% to close at its strongest level so far this calendar year. The domestic currency was buoyed by renewed foreign portfolio inflows into Indian equities and aggressive dollar sales by exporters.

On a monthly basis, the rupee advanced 1.2%, marking its second consecutive month of gains and extending a notable rebound from its record low of 87.95 touched in February. The currency has now recovered nearly 3% over March and April combined, aided by supportive domestic and global factors.

A broad-based decline in the US dollar—driven by investor concerns over potential trade and policy shifts in the US—provided further impetus to the rupee's rally. The dollar index has remained under pressure amid expectations of slower economic momentum and increasing global pushback against US protectionist moves.

Adding to the optimism was growing anticipation of a trade agreement between India and the US, which bolstered investor confidence and supported the rupee, particularly in the latter part of the month. 

Unit	Today	Previous
Dollar/Rupee	84.49	85.26
Dollar Index	99.24	99.02
1-year Dollar/rupee premium (%)	2.30%	2.29%

OUTLOOK
Indian equity markets likely to start the new month on a cautious note, as investors weigh domestic policy signals against lingering geopolitical tensions.

Markets will remain shut on Thursday, for Maharashtra Day.

Any further escalation in tensions with Pakistan or profit-taking in overbought counters such as defence and financials could temper gains. 

In the bond market, yields are expected to remain soft in the near term, following the Reserve Bank of India’s dovish policy stance and its large-scale open market operations. The 10-year benchmark yield could test lower levels if inflation remains under control and RBI continues its liquidity support.  

The rupee may extend its recent appreciation, driven by fresh foreign investments, a softer dollar, and exporters’ dollar sales. However, traders remain alert to geopolitical risks, which could trigger bouts of volatility. The prospect of a US-India trade deal may further support sentiment, barring any adverse global developments.

Key Events & Data Due Friday:

Economic Data

• India April S&P Global Manufacturing PMI
• ECB Economic Bulletin 
• Eurozone April HCOB Manufacturing PMI
• Eurozone April Core CPI
• Eurozone March Unemployment Rate
• India weekly FX Reserves
• US April Nonfarm Payrolls data
• US weekly Baker Hughes Oil Rig Count

Corporate Actions

• Jan-Mar Earnings: Aether Industries, Ami Organics, Archean Chemical Industries, City Union Bank, Deep Industries, Dhampur Bio Organics, Dhani Services, Godrej Properties, Gravita India, Indian Overseas Bank InfoBeans Technologies, Jindal Saw, Latent View Analytics, Marico, Moksh Ornaments, Newgen Software Technologies, Nitco, Omax Autos, Parag Milk Foods, PNB Gilts, R R Kabel, Sadhana Nitrochem, Sanofi Consumer Healthcare India, Subex, Sunteck Realty, Tatva Chintan Pharma Chem, Transwarranty Finance, TRF, V-Mart Retail, Yasho Industries
• Mahindra & Mahindra Financial Services to consider fund raising plan
• Tata Motors to consider fund raising plan
• V-Mart Retail to consider bonus issue of shares