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Markets snap three-week gaining streak as India-Pakistan tensions escalate
May-09-2025

Indian markets snapped 3-week gaining streak and ended lower in passing week amid escalation of conflict with Pakistan. Selling pressure on last day of the week mainly dragged markets down over a percent after the army reported multiple overnight drone and munition attacks by Pakistani forces along the western border, fueling concerns of further escalation between the two nations.

Some of the major developments during the week are:

India’s services sector regains momentum; PMI hits 58.7 in April: After experiencing a slowdown in March, India’s services sector regained momentum in the month of April, driven by a quicker increase in new order inflows, which also underpinned a faster expansion in employment.

Moody's cuts India's GDP projection to 6.3% for 2025: Moody's Ratings cut India's GDP growth projection to 6.3% for 2025 calendar year, from 6.5%, and said that economies globally will see a slowdown on account of heightened US policy uncertainty and trade restrictions.

Automobile retail sales in India grow modest in April: FADA said that overall automobile retail sales in India grew a modest 2.95% in April 2025 to 22,87,952 units with completion of purchases by customers around Chaitra Navratri, Akshay Tritiya, Bengali New Year, Baisakhi and Vishu.

Hostilities between India, Pakistan heighten risks to credit metrics of both countries: S&P Global Ratings has said that the hostilities between India and Pakistan heighten risks to the credit metrics of both countries, and any escalation in clashes would put downward pressure on sovereign credit support.

RBI relaxes norms for investments by FPIs in corporate debt securities: The RBI has relaxed norms for investments by FPIs in corporate debt securities through the general route by withdrawing certain requirements to comply with the short-term investment limit and the concentration limit.

BSE movement for the week

The Bombay Stock Exchange (BSE) Sensex slipped 1047.52 points or 1.30% to 79,454.47 during the week ended May 09, 2025. The BSE Midcap index losses 596.37 points or 1.40% to 42,111.50, while Smallcap index slipped 623.59 points or 1.32% to 46,741.95. On the sectoral front, S&P BSE Realty was down by 431.99 points or 6.33% to 6,394.24, S&P BSE Power was down by 214.78 points or 3.26% to 6,368.69 and S&P BSE PSU was down by 546.94 points or 2.93% to 18,112.22 were the top losers, while S&P BSE Auto was up by 771.23 points or 1.54% to 50,697.31, S&P BSE Consumer Durables was up by 339.99 points or 0.60% to 56,840.42 and S&P BSE Capital Goods was up by 183.90 points or 0.29% to 62,852.21 were the top gainers on the BSE.

NSE movement for the week

The Nifty slipped 338.70 points or 1.39% to 24,008.00. On the National Stock Exchange (NSE), Nifty Next 50 lost 1902.75 points or 2.95% to 62,527.00, Bank Nifty was down by 1520.10 points or 2.76% to 53,595.25, Nifty Mid Cap 100 decreased 481.75 points or 0.90% to 53,223.35 and Nifty IT was down by 11.75 points or 0.03% to 35,880.10.

FII transactions during the week

Foreign Institutional Investors (FIIs) were net buyers in equity segment in the week, with gross purchases of Rs 80,920.27 crore and gross sales of Rs 66,927.03 crore, leading to a net inflow of Rs 13,993.24 crore. They also stood as net sellers in the debt segment with gross purchases of Rs 13,760.09 crore against gross sales of Rs 13,973.74 crore, resulting in a net outflow of Rs 213.65 crore. In hybrid segment, FIIs stood as net sellers, with gross purchases of Rs 77.36 crore and gross sales of Rs 94.87 crore, leading to a net outflow of Rs 17.51 crore.

Industry and Economy

India and the UK clinched a 'landmark' trade deal that will remove taxes on the export of labour-intensive products such as leather, footwear and clothing, while making imports of whisky and cars from Britain cheaper, in a bid to double trade between the two economies to $120 billion by 2030. The world's fifth and sixth-largest economies concluded the deal after three years of on-off negotiations. The pact lowers tariffs on 99 per cent of Indian goods to zero in the UK market while allowing Indian workers to travel to the UK for work without changing Britain's point-based immigration system. Taxes on export of Indian clothing, frozen prawns, jewellery and gems will be cut. 

Outlook for the coming week

In the passing week, Indian equity markets ended with cut of over a one percent amidst escalating geopolitical tensions between India and Pakistan.

In the coming week, investors will be eyeing major macro-economic data starting with the Consumer Price Index (CPI) or retail inflation data for the month of April to be out on May 13 for more cues. On May 14, market participants will be watching for the Wholesale Price Index (WPI) Inflation data for April. On May 15, investors will be awaiting Exports and Imports data as well as Passenger Vehicles data. 

In the ongoing result season, traders will be eyeing earnings of prominent companies, including PVR INOX, Tata Steel, Bharti Airtel, Cipla, GAIL, Hero Motocorp, Tata Motors, Lupin, Tata Motors, Godrej Industries, BHEL and others. 

On the global front, investors would be eyeing few economic data from Consumer Price Index, Redbook YoY on May 13 followed by Producer Price Inflation, Initial Jobless Claims, NY Empire State Manufacturing Index, Industrial Production, Retail Sales on May 15, Fed Balance Sheet, Michigan Consumer Sentiment Prel, Import Prices, Export Prices, Baker Hughes Oil Rig Count on May 16.

Top Gainers 

  • Tata Motors up by 8.67% was the top gainer on Nifty for the week - Tata Motors traded higher amid reports the US is set to announce an agreement with the UK on trade. In case the deal is indeed announced with the UK, it could be a major positive for Jaguar Land Rover, subsidiary of the company, as nearly one-fifth of its revenue comes from the US market. Meanwhile, Tata Motors’ shareholders approved plan to split the automaker into two listed companies.
  • Titan Company up by 5.07% was another top gainer on Nifty for the week - The company reported 12.97% rise in consolidated net profit at Rs 871 crore for Q4FY25 as compared to Rs 771 crore for same quarter in previous year. The total income increased by 18.80% at Rs 15032 crore for Q4FY25 as compared Rs 12653 crore for Q4FY24. On standalone basis, the company reported 10.69% rise in its net profit at Rs 870 crore for Q4FY25 over Rs 786 crore for Q4FY24.

Top Losers 

  • Sun Pharma down by 4.62% was the top loser of the week on Nifty - Pharma stocks came under pressure after U.S. President Donald Trump signed an executive order to ramp up domestic drug manufacturing, stoking concerns over potential disruptions for Indian drug exporters that rely heavily on the U.S. market. Trump signed an executive order to rebuild prescription drug manufacturing in the US, with the goal of reducing reliance on foreign-made medicines.
  • Asian Paints down by 4.57% was another top loser of the week on Nifty - The company reported 45.05% fall in consolidated net profit at Rs 700.83 crore for Q4FY25 as compared to Rs 1,275.30 crore for the same quarter in the previous year. Total income decreased by 5.15% at Rs 8,458.76 crore for Q4FY25 as compared Rs 8,917.87 crore for Q4FY24. The company’s profit fell, and margins remained under pressure due to inflationary pressure and higher ad spends.

Technical viewpoints

During the week, CNX Nifty touched the highest level of 24,589.15 on May 5 and lowest level of 23,935.75 on May 9. On the last trading day, the Nifty closed at 24,008.00 with weekly loss of 338.70 points or 1.39 percent. For the coming week, 23,766.12 followed by 23,524.23 are likely to be good support levels for the Nifty, while the index may face resistance at 24,419.52 and further at 24,831.03 levels.

US Market

The U.S. markets traded mostly in red during the week after the Federal Reserve announced its widely expected decision to leave interest rates unchanged, highlighting increased uncertainty about the economic outlook. 

Some of the major developments during the week are:

U.S. wholesale inventories climb slightly less than expected in March: Wholesale inventories rose by 0.4 percent in March after climbing by upwardly revised 0.5 percent in February. Street expected wholesale inventories to grow by 0.5 percent.

Weekly jobless claims in U.S. dip slightly more than expected: Initial jobless claims dipped to 228,000, a decrease of 13,000 from the previous week's unrevised level of 241,000. Street had expected jobless claims to slip to 230,000.

U.S. labor productivity pulls back more than expected in Q1: Labor productivity fell by 0.8 percent in Q1 after jumping by an upwardly revised 1.7 percent in the fourth quarter of 2024. Street expected labor productivity to decrease by 0.4 percent.

Trade deficit in U.S. spikes to record high in March: The trade deficit soared to a record high $140.5 billion in March from a revised $123.2 billion in February. Street had expected the trade deficit to widen to $129.0 billion.

U.S. services index unexpectedly increases in April: Institute for Supply Management said its services PMI rose to 51.6 in April from 50.8 in March, with a reading above 50 indicating growth. Street had expected the index to edge down to 50.6.

European Market

European markets witnessed weakness during the passing week, as investors digested the monetary policy moves of the Federal Reserve and the Bank of England, and reports about the U.S. and the U.K. striking a trade deal.

Some of the major developments during the week are:

BoE cuts key rate to 4.25% in three-way split: Policymakers of the Bank of England decided to reduce its interest rate by 25 basis points in a three-way split. The Monetary Policy Committee lowered the bank rate to 4.25 percent, as widely expected.

Eurozone retail sales fall slightly: The Eurostat reported that retail sales dropped 0.1 percent month-on-month in March, in contrast to the 0.2 percent rise in February. 

Eurozone private sector growth eases on weaker demand: The HCOB final composite output index fell to 50.4 in April from 50.9 in March, but the reading suggested growth for the fourth straight month. 

German factory orders rise more than forecast: The data from Destatis showed that factory orders advanced 3.6 percent month-on-month in March after remaining flat in February. Orders are forecast to grow 1.4 percent.

Spain industrial output recovers 1.0%: The statistical office INE said that industrial production rose 1.0 percent on an annual basis in March, reversing a 1.9 percent decrease in February. 

Asian Market

Asian markets traded higher during passing week amid easing concerns about the ongoing trade war after US President Donald Trump unveiled the framework of a trade agreement with the U.K.

Some of the major developments during the week are:

Japan household spending rises 2.1% in March: The average of household spending in Japan was up 2.1 percent on year in March. That exceeded expectations for an increase of 0.2 percent following the 0.5 percent fall in the previous month.

China's April exports rise 8.1%, imports dip 0.2%: China's exports rose 8.1 percent in April from the year before, in the tail end of a rush by companies and consumers to beat higher US tariffs that took effect last month. 

China’s exports to US slump 21% in April: China’s exports to the US fell 21% in April while its trade with other economies surged, suggesting that President Donald Trump's tariffs offensive is hastening a shakeup in global supply chains. 

China's services growth hits 7-month low in April: Chinese services activity deteriorated more than expected in April to hit a 7-month low. The Caixin/S&P Global services PMI fell to 50.7 in April from 51.9 in March.

China announces sweeping measures to ease policy: China’s central bank and financial regulators announced sweeping plans to cut key interest rates to support the economy, soften tariff impacts and stabilize markets.
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