Nifty, Sensex to Open in Green Backed by Better-than-Expected GDP and Robust GST Collection
On Monday, June 2, Indian equity benchmarks are likely to open on a positive note. As of 7:21 AM, the GIFT Nifty was trading near the 24,851 mark, up 15 points from its previous close. The expected positive opening is supported by robust GST collections and India’s GDP surpassing estimates.
Asian markets slipped in early trade, mirroring a fall in the U.S. futures amid tariff and geopolitical uncertainty. That said, the U.S. posted a strong performance in the month of May, where both the S&P 500 and Nasdaq recorded their highest monthly gains since November 2023.
In the coming days, market participants will keep a close watch on several important triggers such as the outcome of the Reserve Bank of India’s Monetary Policy Committee meeting, global trade developments, trends in foreign capital inflows, and key macroeconomic indicators.
Recently, key economic data such as India’s GDP growth and GST collections have been released.
India’s economy expanded at 7.4% in the January–March quarter of FY25, beats estimates. This has resulted in an overall GDP growth of 6.5% for the full financial year 2024–25.
On the fiscal front, the government reported a fiscal deficit of ₹15.77 lakh crore for FY25, marginally above the budgeted estimate of ₹15.70 lakh crore. However, this figure is lower than the FY24 fiscal deficit of ₹16.54 lakh crore, which had reached 95.3% of the projected target. The government aims to bring down the fiscal deficit further to 4.4% of GDP in FY26, after achieving the 4.8% target in FY25.
Meanwhile, Goods and Services Tax (GST) revenue remained strong. In May, GST collections rose 16.4% year-on-year to surpass ₹2.01 lakh crore, following April’s record collection of ₹2.37 lakh crore.
On May 30, Foreign Institutional Investors (FIIs) were net sellers, having sold equities worth ₹6,449.74 crore. Domestic Institutional Investors (DIIs), on the other hand, bought shares totalling ₹9,095.91 crore during the same session.
DIIs have emerged as net buyers over the past nine trading sessions.
On Friday, the Indian stock market closed on a negative note, with both key indices ending the session in the red. Despite the decline, the Nifty 50 managed to wrap up May with a 1.7% gain, marking its third straight month of positive returns. The Sensex fell by 182.01 points (0.22%) to settle at 81,451.01, while the Nifty 50 slipped 82.90 points (0.33%) to end at 24,750.70.
Asian stock markets slipped on Monday following an announcement by the U.S. President Donald Trump to double steel import tariffs to 50%, set to take effect from June 4.
The U.S. stock market ended Friday's session with minimal movement following a volatile day. President Donald Trump initially criticised China but later expressed optimism about reaching a trade agreement, which influenced market sentiment.
The Dow Jones Industrial Average inched up by 54.34 points, or 0.13%, to close at 42,270.07. The S&P 500 slipped slightly by 0.48 points, or 0.01%, finishing at 5,911.69. Meanwhile, the Nasdaq Composite dropped 62.11 points, or 0.32%, settling at 19,113.77. Over the month of May, the S&P 500 gained approximately 6.2%, while the Nasdaq recorded a strong monthly rise of 9.6%.
U.S. President Donald Trump announced that steel tariffs would be increased from 25% to 50%, effective Wednesday, June 4. He also highlighted the collaboration between Japan's Nippon Steel and U.S. Steel, promoting it as a strategic partnership.
In April, the Personal Consumption Expenditures (PCE) Price Index saw a modest rise of 0.1%, following no change in March. On a year-over-year basis, the index climbed 2.1%, slightly lower than the 2.3% growth recorded in March. When excluding the often-volatile food and energy categories, the core PCE price index also edged up by 0.1% for the month
Crude oil prices surged following a rise in geopolitical tensions and trade-related uncertainties, coupled with a smaller-than-anticipated production increase by OPEC. Brent crude climbed 2.09% to settle at $64.09 per barrel, while US WTI futures advanced 2.30%, reaching $62.19 per barrel.
Disclaimer: The article is for informational purposes only and not investment advice.
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