Market Commentary - Mid-Session

01-Jul-2025      13:38

Barometers trade range bound; European mrkt lower

The domestic equity indices continued to trade flat in afternoon trade, despite optimism over a potential US-India trade deal and favorable global cues. Focus remained on foreign inflows and the upcoming end of the US tariff reprieve. The Nifty traded above the 25,500 level.

PSU Bank and oil & gas stocks advanced while media, realty and pharma shares declined.

At 13:25 IST, the barometer index, the S&P BSE Sensex, advanced 40.93 points or 0.05% to 83,644.34. The Nifty 50 index added 9.40 points or 0.03% to 25,527.10.

The broader market underperformed the frontline indices. The S&P BSE Mid-Cap index declined 0.43% and the S&P BSE Small-Cap index fell 0.42%.

The market breadth was negative. On the BSE, 1,835 shares rose and 2,086 shares fell. A total of 151 shares were unchanged.

Economy:

The seasonally adjusted HSBC India Manufacturing Purchasing Managers' Index (PMI) rose to a 14-month high of 58.4 in June, up from 57.6 in May. The headline figure was above its long-run average of 54.1 and pointed to a substantial improvement in the health of the sector. The manufacturing sector experienced a strong end to the first fiscal quarter, marked by improved trends in output and new orders, alongside a record upturn in employment.

June also saw a quicker upturn in new order inflows. The rate of expansion was the strongest in close to a year. According to panel members, the increase was supported by marketing efforts and a substantial rise in exports.

India's industrial output growth fell to a nine-month low of 1.2% in May 2025, dragged down by weak performance in the manufacturing, mining, and electricity sectors, data released by the National Statistical Office (NSO) on Monday showed. The factory output, measured by the Index of Industrial Production (IIP), had grown 6.3% in May 2024, while the April 2025 estimate has been revised to 2.6%, slightly down from the earlier 2.7%. According to the data, manufacturing ' which forms over three-fourths of the IIP ' grew 2.6% in May, down from 5.1% a year ago. Mining output shrank 0.1%, reversing a 6.6% expansion in May last year. Electricity generation saw a sharp contraction of 5.8% compared to a robust 13.7% growth a year ago.

India's gross collection of goods and services tax (GST) hit an all-time high of Rs 22.08 lakh crore in the financial year 2024-25, marking a 9.4% year-on-year (YoY) growth compared to the previous financial year, according to an official statement on Monday, 30 June 2025. On 1 July 2025, India will mark the completion of eight years since the implementation of the GST.

India's fiscal deficit for the first two months of FY26 stood at Rs 13,163 crore, or just 0.8% of the full-year target of Rs 15.69 lakh crore, according to data released by the Controller General of Accounts on Monday. The year-ago deficit for the same period was significantly higher at Rs 50,600 crore.

Gainers & Losers:

Apollo Hospitals Enterprise (up 3.13%), Bharat Electronics (BEL) (up 2.25%), Indusind Bank (up 1.97%), Reliance Industries (up 1.82%) and Jio Financial Services (up 1.24%) were the major Nifty50 gainers.

Axis Bank (down 2.37%), Nestle India (down 2.05%), Eternal (down 1.44%), Shriram Finance (down 1.40%) and Trent (down 1.09%) were the major Nifty50 losers

Stocks in Spotlight:

VST Tillers Tractors added 1.32% after the company's total sales surged 92.69% to 7,149 units in June 2025 from 3,710 units sold in June 2024.

Escorts Kubota shed 0.20%. The company said that its Agri Machinery Business has sold 11,498 tractors in June 2025, registering a growth of 2.2% as compared with 11,245 tractors sold in June 2024.

Nesco rose 2.19% after the company said that its board has approved a capex of up to Rs 3,500 crore for for development of Tower 2 in IT Park at Nesco Center, Goregaon.

Steel Strips Wheels (SSWL) slipped 4.40% after the company reported a net turnover of Rs 350.67 crore for June 2025, down 2.08% YoY growth compared to Rs 358.11 crore posted in June 2024.

NMDC fell 3.10% after the state-owned iron ore miner informed that it has reduced the prices of its lump ore and fines, with the effect from 1 July, 2025.

Bajaj Auto rose 0.23%. The company has reported total auto sales of 3,60,806 units for June 2025, which is higher by 1% as compared with the figure of 3,58,477 units recorded in June 2024.

Kalpataru Projects International declined 1.64. The company along with its international subsidiaries, has secured new orders worth approximately Rs 989 crore.

Global Markets:

Most European markets traded lower ahead of euro zone inflation print.

Asian shares traded mixed on Tuesday as investors evaluated record highs on Wall Street and the potential global effects of U.S. President Donald Trump's tariff policies. The 90-day tariff reprieve is set to expire next week.

U.S. Treasury Secretary Scott Bessent stated on Monday that countries are negotiating in good faith. However, he cautioned that tariffs could return to the levels announced on April 2 if talks do not progress due to what he described as recalcitrant behavior.

Hong Kong market remained closed for a public holiday. In mainland China, the Caixin Manufacturing PMI rose to 50.4 in June, a significant improvement from May's reading of 48.3. A PMI reading above 50 indicates expansion. This data follows the official government PMI, which showed a third consecutive monthly contraction in Chinese manufacturing activity for June.

On Wall Street, the S&P 500 gained 0.52% to close at another record high. The NASDAQ Composite rose 0.47%, also reaching a new peak, while the Dow Jones Industrial Average climbed 0.63%.

The gains were supported by news of a trade agreement between the United States and China. The agreement raised optimism that further trade deals could be finalized before the July 9 deadline set by President Trump.

Investor sentiment also received a boost after Canada withdrew its digital services tax on technology companies. The tax was scheduled to take effect within hours but was suspended in an effort to revive trade discussions with the United States. President Trump had previously cited the tax as a barrier to negotiations. Canadian Prime Minister Mark Carney and President Trump are now expected to meet with the goal of finalizing a trade agreement by July 21.

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