The Indian stock market experienced a significant downturn today, with both the Sensex and Nifty indices registering substantial losses. The Sensex closed down approximately 700 points, while the Nifty dipped below the 24,600 mark. Several factors contributed to this negative sentiment, creating a volatile trading environment.
Several key stocks experienced notable declines, contributing to the overall market slump. Hindalco and Tata Steel, two major players in the metals sector, each fell by around 2%. This decline in metal stocks reflects broader concerns about global demand and economic growth, as well as sector-specific challenges.
Factors Influencing the Market Downturn:
- Global Cues: Mixed global cues have played a significant role in setting a cautious tone for the Indian market. Concerns about renewed U.S. tariff concerns have weighed heavily on IT and auto stocks.
- Profit Booking: After a strong rally, some investors engaged in profit booking, leading to a decline in share prices.
- Sectoral Weakness: Selling was evident across various sectors, including IT, auto, pharma, metals, and FMCG, intensifying the overall market decline. The Nifty Bank index, however, outperformed broader indices driven by strong buying in PSU banking names.
- FII Activity: Foreign Institutional Investors (FIIs) have been selling shares, adding to the downward pressure.
- GDP Data: While recent GDP data showed stronger-than-expected growth in Q4, the full-year GDP growth slightly missed estimates, creating some uncertainty. India's real gross domestic product (GDP) came in at 7.4 per cent in the fourth quarter (Q4) of the financial year 2024–25 (FY25). However, full-year GDP growth for FY25 came in at 6.5 per cent, narrowly missing the RBI's estimate of 6.6 per cent.
- RBI Policy Meeting: The Reserve Bank of India (RBI) is expected to hold a policy meeting on June 6 2025, with markets anticipating a potential 25 basis points rate cut. This could significantly affect banking, financial services, and interest-sensitive stocks, as well as overall market trends.
Performance of Key Stocks:
- Hindalco: Hindalco Industries closed the previous week on a negative note losing -3.28%. Technically, Hindalco Industries share price will see immediate support at 620.53 and immediate resistance would be seen at 658.08.
- Tata Steel: Tata Steel's share price has seen some volatility. The company announced a dividend of Rs 3.6 per share on May 12, 2025, with a record date of June 6, 2025.
Expert Recommendations:
Despite the current market downturn, some experts remain optimistic about specific stocks. Motilal Oswal Financial Services recommends Radico Khaitan and JK Cement as top stock picks for the week starting June 2, 2025. Radico Khaitan, a leading IMFL manufacturer, is projected to experience robust growth driven by premiumization. JK Cement reported strong fourth-quarter results and aims for significant volume growth and cost savings, making it a preferred pick in the cement sector.
Market Outlook:
The Indian stock market is currently experiencing a period of consolidation and volatility. Investors are advised to remain cautious and closely monitor global cues, economic data, and FII activity. Support for the Nifty 50 index lies at 24,650, while resistance is seen at 25,000.
