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Weakness persists over Dalal Street in early afternoon session
May-29-2026

A weakness persisted over the Dalal Street in early afternoon session, with both Sensex and Nifty trading lower, on the back of selling at Oil & Gas and Utilities counters. Traders got cautious as, the World Economic Forum (WEF) in its latest May 2026 edition of the Chief Economists’ Outlook has showed that the global economic outlook has darkened, with 89% of the chief economists surveyed expect global growth to weaken over the next 12 months, and more than one in five expect it to weaken significantly, on the back of the conflict in the Middle East and closure of the Strait of Hormuz which have disrupted vital energy, food and fertilizer flows, threatening access and growth. Besides, global inflation is expected to rise as volatility increases.

On the global front, Asian markets were trading mostly in green, after reports suggested that the U.S. and Iran have reached a temporary agreement to extend their ceasefire by 60 days, resume unrestricted shipments through the Strait of Hormuz and begin negotiations over Tehran's nuclear program.

The BSE Sensex is currently trading at 75803.12, down by 64.68 points or 0.09% after trading in a range of 75681.79 and 76220.02. There were 10 stocks advancing against 20 stocks declining on the index.

The top gaining sectoral indices on the BSE were IT up by 2.16%, TECK up by 1.31%, Telecom up by 0.93%, Realty up by 0.93% and Industrials up by 0.16%, while Oil & Gas down by 1.18%, Utilities down by 0.87%, Energy down by 0.78%, Metal down by 0.73% and Auto down by 0.72% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 3.55%, Tech Mahindra up by 2.12%, Larsen & Toubro up by 1.58%, HCL Technologies up by 1.25% and Trent up by 1.21%. On the flip side, Interglobe Aviation down by 2.28%, Power Grid Corp down by 1.68%, NTPC down by 1.31%, Tata Steel down by 1.19% and Reliance Industries down by 1.08% were the top losers.

Meanwhile, amid geopolitical uncertainty and the West Asia crisis weighing on local currency, the Former RBI Governor Duvvuri Subbarao has said the central bank must allow some more depreciation in the rupee to help absorb external pressures, and choose liquidity measures, rather than going for rate hikes, if inflation risks intensify. He noted that the monetary policy should be used as a ‘last resort’ to defend the exchange rate. Further, the rupee should be allowed to adjust rather than be rigidly defended because the current pressures reflect a deterioration in India's external balance. A weaker rupee acts as a natural shock absorber.

Subbarao pointed that stabilising the exchange rate during times of pressure is fundamentally a challenge of managing expectations and the Exchange-rate crises are ultimately crises of confidence. He added that if investors, importers and households begin to believe the rupee will weaken further, they behave in ways that actually make it weaken further. Exporters delay bringing money back home, importers rush to buy dollars, households move into gold, and investors hedge aggressively. Therefore, communication becomes as important as intervention and policymakers must act decisively, but without appearing panicked or defensive.

Moreover, he highlighted that Monetary Policy Committee has a difficult balancing act with limited room to manoeuvre. He pointed that that lowering interest rates to support growth could aggravate inflation and intensify exchange-rate pressures, while aggressive rate increases could hurt economic activity and impact the GDP growth. For the current situation, he suggested that RBI should wait and assess whether inflationary pressures become broader through the system, instead of immediately resorting to policy rate hikes.

The CNX Nifty is currently trading at 23856.85, down by 50.30 points or 0.21% after trading in a range of 23815.10 and 24002.80. There were 14 stocks advancing against 35 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were Infosys up by 3.63%, Tech Mahindra up by 2.09%, Wipro up by 1.67%, Larsen & Toubro up by 1.47% and HCL Technologies up by 1.36%. On the flip side, Eicher Motors down by 2.77%, ONGC down by 2.32%, Interglobe Aviation down by 2.28%, Max Healthcare Inst down by 1.79% and Bajaj Auto down by 1.68% were the top losers.

Asian markets were trading mostly in green; KOSPI increased 290.86 points or 3.43% to 8,476.15, Nikkei 225 surged 1762.88 points or 2.65% to 66,456.00, Taiwan Weighted added 1096.5 points or 2.45% to 44,732.94, Jakarta Composite gained 87.69 points or 1.41% to 6,217.88, Hang Seng advanced 229.84 points or 0.92% to 25,236.00, and Straits Times rose 44.91 points or 0.9% to 5,034.10, while Shanghai Composite weakened 30.07 points or 0.74% to 4,068.57.
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