Stocks Edge Higher; Rupee Declines Amid Crude, Geopolitical Jitters

HIGHLIGHTS

• PI Industries surge 5% after biggest customer Kumiai Chemical raises guidance
• Reliance Infra shares surge 10% after NCLAT suspends NCLT order admitting company to insolvency
• Railway stocks rally up to 12% on capex push hope
• Maruti Suzuki rise as co expands solar power capacity at Kharkhoda, Manesar units

Indian equity benchmarks ended higher on Wednesday following a largely rangebound session, with the Nifty 50 settling above the 24,600 mark. The broader market, once again, outperformed the frontline indices, continuing the recent trend of investor preference for mid- and small-cap stocks.

Despite mixed global cues and subdued overall volumes, investor interest in domestic capital goods, railways, defence, and chemicals segments helped support the market. The Nifty’s sustained close above key levels indicates potential consolidation with a positive bias, as investors await the upcoming RBI policy and key macroeconomic data releases for fresh direction.

Sectoral Performance
Among sectoral indices, BSE Realty declined 0.7%, weighed by profit-taking, while telecom, metal, and oil & gas indices posted moderate gains of 0.5% to 1%. Investor interest remained firm in railways and defence-linked stocks, spurred by optimism around government spending and order visibility.

Garden Reach Shipbuilders surged 6%, while Cochin Shipyard gained 3%, reflecting sustained buying in shipbuilding counters. Railway stocks saw strong traction—Ircon International, RailTel, and RVNL rallied between 6% and 14%, supported by expectations of new infrastructure awards and robust order books.

Reliance Infrastructure spiked 11% after the National Company Law Appellate Tribunal suspended an earlier insolvency order by the NCLT, lifting investor sentiment on the counter.

Among notable gainers in the specialty chemical space, PI Industries rose over 4% after its top customer, Kuimai, upgraded its demand outlook—providing confidence in export growth.

Top Gainers	% Change	Top Losers	% Change
NIFTY OIL & GAS	0.67%	NIFTY REALTY	-0.70%
NIFTY METAL	0.60%
NIFTY IT	0.33%
NIFTY AUTO	0.27%
NIFTY PSU BANK	0.24%

Indian government bonds ended flat on Wednesday in a muted session, as traders stayed on the sidelines ahead of the Reserve Bank of India’s monetary policy announcement due Friday. The benchmark 10-year gilts yield settled at 6.2065%, slightly above the previous close of 6.2022%.

Market participants largely refrained from aggressive positioning, opting instead to await firm signals from the central bank. A 25 basis point rate cut is widely anticipated, which would mark the RBI’s third consecutive reduction in 2025. The central bank has already cut policy rates by 50 basis points this calendar year and infused approximately ₹8.5 trillion into the banking system between December and May, supporting overall liquidity conditions.

While the consensus points to a 25 bps easing, some voices, including the State Bank of India, have called for a more aggressive 50 bps rate cut to jumpstart credit demand and accelerate the growth cycle. Bond traders, however, appear to be pricing in only a moderate move, given the current inflation trajectory and macroeconomic backdrop.

With retail inflation projected to stay below the 4% target for most of the year and growth data showing resilience, expectations are also building around the RBI possibly revising its inflation forecast lower. Traders will watch closely not just the rate action, but also the central bank’s commentary on liquidity support measures, which could have a greater influence on short-end yields in the coming sessions.

Tenure	Today	Previous
10-year Gilt	6.21%	6.20%
5-year gilt	5.86%	5.85%
5-year OIS	5.64%	5.64%

The Indian rupee extended its decline for the second straight session on Wednesday, closing 29 paise lower at 85.90 against the US dollar. The local currency was weighed down by risk-averse global sentiment and persistent foreign fund outflows ahead of key macroeconomic events.

Elevated crude oil prices and geopolitical uncertainties, particularly the ongoing Russia-Ukraine tensions, exerted additional pressure on the rupee. Brent crude rose by 0.41% in futures trade, pushing energy import bills higher and affecting sentiment around the currency.

Market participants remained cautious as they awaited the Reserve Bank of India’s upcoming monetary policy decision, which could offer clarity on the future path of interest rates and liquidity management. Uncertainty over the central bank’s tone and measures added to the rupee’s weakness.

The rupee has now depreciated by 51 paise over two sessions, highlighting near-term vulnerability. However, analysts noted that underlying support remains from anticipated foreign inflows and broader dollar softness, which could help the rupee stabilise if geopolitical and crude-related headwinds ease.

Focus will now shift to the RBI policy announcement and US macro data, including the non-farm payrolls report, both of which will provide direction for the currency in the coming sessions.

Unit	Today	Previous
Dollar/Rupee	85.90	85.59
Dollar Index	99.21	98.92
1-year Dollar/rupee premium (%)	1.90%	1.93%

OUTLOOK
Indian equity markets are expected to open on a cautious note on Thursday, with investors closely watching the Reserve Bank of India’s monetary policy decision. While broader sentiment remains upbeat on continued domestic flows and infrastructure-focused earnings momentum, recent volatility in heavyweights and global uncertainties may temper gains. PSU banks, shipbuilding, and railway-linked stocks are likely to see further traction following recent institutional interest. 

The Indian rupee may continue to trade with a mild weakening bias unless supported by stronger policy signals or dollar inflows. The local unit has fallen for two straight sessions, closing at 85.90 against the US dollar, pressured by geopolitical concerns and crude prices. The rupee could remain range-bound between 85.80–86.10. Global cues, including the US non-farm payrolls report and oil price movement, will also shape rupee direction in the near term.

Key Events & Data Due Thursday:

Economic Data

• German April factory orders data 
• US April trade data
• US weekly jobless claims data

Corporate Actions

• Agro Phos India to consider Jan-Mar earnings 
• Mercator to consider Jan-Mar earnings

Policy Events

• ECB interest rate decision
• ECB President Lagarde speaks
• US FOMC Member Harker speaks