Indian Markets to Open Weak Amid Operation Sindoor Developments; India-UK Seal Free Trade Deal, BSE in Focus After Q4 Results
Pre-Market Update: On Wednesday, May 7, the Indian markets are expected to open on a weaker note as escalating tensions between India and Pakistan. The situation grew more intense after the Indian Armed Forces initiated 'Operation Sindoor,' aimed at dismantling terrorist infrastructure across the border in Pakistan.
As of 07:15 am, Gift Nifty hovered near the 24,353 mark, showing a discount of about 62 points over the previous close of Nifty futures.
The US stock market ended lower for a second straight session on Tuesday while Asian markets traded higher on potential US-China trade talks. India has finalised a free trade agreement with UK, which will reduce automotive tariffs. On the stock-specific action, BSE has announced its Q4 results on Tuesday, showing a 364% jump in net profit.
Looking ahead, the Indian market will decide its moment on stock-specific action and also the military operations held across the border.
In a pre-dawn operation on Wednesday, the Indian Armed Forces carried out ‘Operation Sindoor’, targeting terrorist facilities located in Pakistan and Pakistan-occupied Kashmir (PoK). According to the Ministry of Defence, the mission struck nine identified locations. The operation was described as precise and restrained, with the objective of neutralising terrorist camps responsible for orchestrating attacks against India.
India and the United Kingdom have finalised a significant free trade agreement under which India will reduce its high automotive tariffs from over 100% to 10%. The deal also outlines that India will lower import duties on a range of British products such as whisky, gin, cosmetics, and medical equipment.
Bombay Stock Exchange (BSE) reported a 364% YoY jump in net profit to ₹493.04 crore for Q4 FY24-25, compared to ₹106.16 crore a year earlier, while revenue from core operations rose 75% to ₹847 crore. The company declared a final dividend of ₹23 per share (₹5 special dividend to mark its 150th year and ₹18 regular dividend) on a face value of ₹2 each, subject to shareholder approval at the 20th AGM. The record date for dividend eligibility is May 14, 2025.
Coal India, Punjab National Bank, Dabur India, MRF, United Breweries, APL Apollo Tubes, Housing & Urban Development Corporation, Voltas, Blue Star and Tata Chemicals will announce their Q4 earnings today.
Talking about institutional inflows, it has been strong in recent times.
On May 06, Foreign Institutional Investors (FIIs) were net buyers, purchasing ₹3,794.52 crore worth of shares. Domestic Institutional Investors (DIIs) sold shares worth ₹1,397.68 crore during the same period.
FIIs remain net buyers for the last 14 trading sessions, infusing optimism in the Indian stock market, while DIIs ended their buying streak on the seventh trading session.
On Tuesday, Indian equity markets closed in the red as rising geopolitical tensions between India and Pakistan weighed on investor sentiment. The Sensex declined by 155.77 points (0.19%) to end the day at 80,641.07. Meanwhile, the Nifty 50 slipped below the 24,400 mark, finishing 81.55 points (0.33%) lower at 24,379.60.
Asian markets saw modest gains amid optimism around possible US-China trade discussions. Japan's Nikkei 225 inched up by 0.22%, while the broader Topix index advanced 0.38%. South Korea's Kospi edged 0.32% higher, although the Kosdaq slipped by 0.7%. Hong Kong’s Hang Seng index started trading on a strong footing and was up by 1.64%.
U.S. stock markets slipped for the second consecutive session on Tuesday. The Dow Jones Industrial Average dropped by 389.83 points, a decline of 0.95%, closing at 40,829. The S&P 500 also retreated, losing 43.48 points or 0.77% to settle at 5,606.90. Meanwhile, the Nasdaq Composite ended the day down 154.58 points, or 0.87%, finishing at 17,689.66.
In March, the U.S. trade deficit expanded significantly, reaching an all-time high of $140.5 billion. This marks a 14% increase, or $17.3 billion more than the previous month.
Gold prices declined as investors' interest in safe-haven assets waned following renewed optimism surrounding potential trade negotiations between the US and China. The spot price of gold dropped by 1.3% to $3,386.36 per ounce, while US gold futures slipped 0.8%, settling at $3,395.20.
Crude oil prices moved higher amid indications of falling output in the US and stronger consumption trends in Europe and China. Brent crude futures gained 0.69% to reach $62.58 per barrel, and US West Texas Intermediate (WTI) crude advanced 0.86%, ending at $59.60 per barrel.
Disclaimer: The article is for informational purposes only and not investment advice.
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