Positive Start Expected for Nifty as RBI Rolls Out Record Dividend; India Becomes 4th Largest Economy
On Monday, May 26, Indian equity benchmarks are poised to open on a positive note. As of 7:33 am, the Gift Nifty was trading near the 24,940 mark, up 57 points from the previous close, indicating a likely green start to the session.
A slew of positive developments are supporting the bullish sentiment. To begin with, the Reserve Bank of India has announced a record-high dividend payout for FY25, which is expected to significantly ease the government's fiscal position and support economic growth. Adding to the optimism, the southwest monsoon made an early onset over Kerala on Saturday—its earliest arrival over the Indian mainland since 2009. Furthermore, the U.S. President Donald Trump announced a delay in imposing a 50% tariff on the European Union, pushing the deadline to July 9.
Asian markets witnessed gains, and US stock futures edged up as President Donald Trump postponed the imposition of tariffs on the European Union.
In the coming week, investors will keep a close watch on several important market drivers, such as the final batch of Q4 earnings, key domestic economic indicators (PMI & GDP growth), the May series F&O expiry, trends in foreign fund flows, and cues from global markets.
India has overtaken Japan to become the world’s fourth-largest economy, NITI Aayog Chief Executive Officer (CEO) BVR Subrahmanyam said. “We are a $4 trillion economy as I speak,” said BVR Subrahmanyam. He stated that India may soon surpass Germany and become the third-largest economy in the world.
For the financial year 2024–25, the Reserve Bank of India (RBI) has approved a record surplus transfer of ₹2.69 lakh crore to the central government. This marks a 27% increase compared to the ₹2.1 lakh crore transferred in FY24.
India's foreign exchange reserves declined by $4.89 billion, reaching $685.73 billion for the week ending May 16. Despite the dip, the current reserves are estimated to be sufficient to cover around 10 to 12 months of the country's import requirements.
Along with the economic updates, stock-specific movements are expected to persist as the focus remains on Q4 earnings. Several prominent Indian companies are scheduled to announce their fourth-quarter results on Monday.
General Insurance Corporation of India, Aurobindo Pharma, Sundaram Finance, Fertilisers and Chemicals Travancore, Gillette India, Sumitomo Chemical India Limited, Bayer CropScience, KEC International, Brainbees Solutions, Blue Dart Express and Schneider Electric Infrastructure are scheduled to announce their Q4 earnings today.
On May 23, Foreign Institutional Investors (FIIs) were net buyers, purchasing equities worth ₹1,794.59 crore. Domestic Institutional Investors (DIIs), on the other hand, bought shares amounting to ₹299.78 crore during the same session.
On Friday, Indian equity markets closed with notable gains, as the Nifty 50 crossed the 24,800 mark, reflecting a stronger risk appetite among investors.
The Sensex surged 769.09 points (0.95%) to settle at 81,721.08, while the Nifty 50 advanced by 243.45 points (0.99%) to end at 24,853.15.
Asian stock markets opened the week with gains on Monday. Japan's Nikkei 225 climbed 0.49%, and Hong Kong's Hang Seng index pointed to a negative start, trading down by 0.4%.
U.S. stock markets ended in negative territory on Friday, posting losses for the week as renewed trade concerns resurfaced. Investor sentiment was hit after US President Donald Trump suggested imposing 50% tariffs on European imports.
The Dow Jones Industrial Average dropped 256.02 points (0.61%) to close at 41,603.07. The S&P 500 slipped 39.19 points (0.67%) to end at 5,802.82, while the Nasdaq Composite declined 188.53 points (1.00%) to settle at 18,737.21.
On a weekly basis, the Dow lost 2.47%, the S&P 500 fell 2.61%, and the Nasdaq retreated 2.48%.
However, as of the latest update, the U.S. President Donald Trump has agreed to delay 50% tariffs on imports from the European Union, extending his deadline for trade talks until July 9 after the head of the EU executive body said the bloc needed more time to “reach a good deal”
Crude oil prices edged higher following President Trump’s decision to extend the trade negotiation deadline with the European Union. Brent crude rose by 0.51%, reaching $65.11 per barrel, while West Texas Intermediate (WTI) crude increased by 0.49% to settle at $61.83 a barrel.
Gold retreated from its recent two-week peak. Spot prices dipped by 0.5% to $3,339.13 per ounce.
Disclaimer: The article is for informational purposes only and not investment advice.
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