BSE Sensex Sinks Over 1,200 Points Despite U.S.-China Trade Truce, Indo-Pak Ceasefire Offers Regional Calm....
In a notable gesture of goodwill, Beijing has also agreed to ease some non-tariff barriers, including restrictions on rare earth exports — a move seen as a strategic concession. The breakthrough followed intense weekend negotiations in Geneva, where both sides reported “substantial progress.”
A joint communiqué highlighted the shared goal of establishing “a sustainable, long-term, and mutually beneficial economic and trade relationship.” The development marks a significant de-escalation in the trade war that had disrupted global supply chains, triggered market volatility, and raised the specter of a global recession.
Adding to the geopolitical reprieve, India and Pakistan announced a renewed commitment to uphold the ceasefire agreement along the Line of Control. While the ceasefire largely held in spirit since 2021, this renewed vow — facilitated through backchannel diplomacy — signals a de-escalation in border tensions that have occasionally flared in recent years. The development is expected to ease regional anxieties and bring a degree of political stability to South Asia.
Global Rally Meets Domestic Profit Booking....
Wall Street responded with a powerful rally. The Dow Jones Industrial Average surged 2.81%, the S&P 500 advanced 3.26%, and the Nasdaq jumped 4.35%, led by tech giants with exposure to Chinese markets such as Apple and Tesla. Asian and European markets opened higher on Tuesday, echoing the upbeat mood.
However, Indian equity markets diverged from the global trend. Despite easing global trade tensions and regional calm, domestic indices slipped due to profit booking and sectoral underperformance. The IT, FMCG, and realty sectors were under pressure, even as PSU banks, pharma, and media stocks held firm.
At 14:26 IST, the S&P BSE Sensex had plunged 1,225.28 points or 1.49% to 81,204.62. Broader market indices outperformed, with the BSE Mid-Cap index rising 0.26% and the Small-Cap index up 0.76%. Market breadth remained healthy, with 2,427 advancing shares versus 1,414 decliners.
Stock Focus: Defence, Cybersecurity, and Telecom Counters Hold Ground...
Caution Zone: Rights Issues Raise Investor Eyebrows....
Caution is advised for Marshall Machines Ltd (₹10.70) and Debock Industries Ltd (₹2.22), both of which saw price erosion following rights issues. With limited positive updates from their management and the regulator SEBI looking at the other side, investors are urged to stay on the sidelines until clarity emerges. Don't take any fresh positions.
Conclusion: Global Tailwinds, Local Crosswinds....
While geopolitical developments — from the U.S.-China trade pause to the Indo-Pak ceasefire — signal broader stability, Indian markets remain subject to domestic triggers, sectoral rotations, and inflationary data.
The Reserve Bank of India (RBI) has scheduled its next Monetary Policy Committee (MPC) meeting for June 4–6, 2025. This will be the second of six planned meetings in the fiscal year 2025–26.
In the previous meeting held from April 7–9, 2025, the RBI reduced the repo rate by 25 basis points to 6.00%, citing easing inflationary pressures and a gradual economic recovery. However, with the upcoming Consumer Price Index (CPI) data yet to be released, the central bank is expected to proceed cautiously in its June meeting.
Investors and market participants should closely monitor the forthcoming inflation data and global economic indicators, as these will significantly influence the RBI's policy decisions in the upcoming meeting. In this climate of guarded optimism, it's wise to ride the uptrends — but with eyes wide open. When inflation data speaks and the RBI responds, markets will surely echo the sentiment.
