Market Commentary End Session News Details

Sensex sheds 117 points after RBI policy; healthcare stocks buck trend

(05-Jun-26   16:50)

The headline equity benchmarks closed lower on Friday as investor sentiment soured after the Reserve Bank of India kept key interest rates unchanged. The central bank also trimmed its FY27 GDP growth forecast to 6.6% from around 6.9% and raised its inflation projection to about 5.1%, reinforcing concerns over the economic outlook. Weak cues from Asian market added to the pressure. The Nifty slipped below the 23,400 mark, dragged down by selling in metal and IT stocks. Healthcare shares, however, defied the broader market weakness and emerged as a pocket of strength.

The S&P BSE Sensex declined 116.67 points or 0.16% to 74,243.34. The Nifty 50 index slipped 49.85 points or 0.21% to 23,366.70.

Trent (down 2.23%), HDFC Bank (down 0.95%) and Reliance Industries (down 0.52%) were major Nifty drags today.

The broader market outperformed the frontline indices. The BSE 150 MidCap Index fell 0.10% and the BSE 250 SmallCap Index shed 0.01%.

The market breadth was negative. On the BSE, 2,056 shares rose and 2,138 shares fell. A total of 217 shares were unchanged.

RBI MPC Outcome:

The MPC, chaired by RBI Governor Sanjay Malhotra, unanimously voted to maintain the repo rate under the liquidity adjustment facility (LAF) at 5.25%. Accordingly, the standing deposit facility (SDF) rate remains at 5%, while the marginal standing facility (MSF) rate and the bank rate continue at 5.50%. The committee also retained its neutral policy stance.

The RBI noted that the prolonged conflict in West Asia has increased risks to both global growth and inflation. Volatile energy markets, falling crude inventories and rising commodity prices have prompted major central banks to adopt a more cautious approach, with advanced economies expected to lean towards tighter monetary policies.

On the domestic front, economic activity has remained resilient, supported by steady private consumption, sustained investment momentum, robust services exports and strong merchandise export growth in April 2026. However, higher freight and insurance costs, coupled with geopolitical uncertainties, are beginning to weigh on the economy. The central bank also flagged concerns over a deficient south-west monsoon, though various government initiatives are expected to help mitigate the impact on agriculture and rural demand.

Taking these factors into account, the RBI revised its FY27 real GDP growth forecast to 6.6% from 6.9% projected earlier. Growth is now estimated at 6.6% in Q1, 6.3% in Q2, 6.5% in Q3 and 6.8% in Q4. The central bank said prolonged supply chain disruptions, volatility in global financial markets and weather-related shocks remain key downside risks to growth.

CPI inflation for FY27 has been projected at 5.1%, compared with the earlier estimate of 4.6%. Quarterly inflation is expected at 4.2% in Q1, 5.1% in Q2, 5.9% in Q3 and 5.4% in Q4, while core inflation is projected at 4.7% for the year.

The RBI highlighted that elevated energy prices, global supply constraints, a weaker monsoon outlook and the risk of El Ni'o have increased inflation uncertainties. Given these evolving risks, the MPC decided that maintaining the current policy rate and stance would be appropriate until greater clarity emerges.

The minutes of the MPC meeting will be published on 19 June 2026. The next MPC meeting is scheduled for 3 to 5 August 2026.

Economy:

India's economy grew at a higher pace of 7.7% during 2025-26 as compared to 7.1% in 2024-25, according to government data released on Friday. In January-March period of the 2025-26 fiscal year, the gross domestic product (GDP) has been estimated to grow 7.8%, the Ministry of Statistics & Programme Implementation (MoSPI) said.

Meanwhile, the government has announced a series of reforms to attract long-term foreign capital, including exempting Foreign Portfolio Investors (FPIs) from income tax on interest income and capital gains arising from investments in government securities (G-Secs) with effect from 1 April 2026. Similar tax benefits have been extended to the Bank for International Settlements (BIS).

The government has also expanded foreign investor access to government bonds by including additional long-tenor securities and Sovereign Green Bonds under the Fully Accessible Route (FAR), while removing certain investment restrictions under the General Route. At the same time, investment norms for individual Persons Resident Outside India (PROIs) have been liberalised, allowing them to invest in listed Indian equities through the Portfolio Investment Scheme with higher investment limits. The Finance Ministry said the measures are aimed at simplifying market access, enhancing ease of doing business and attracting stable foreign inflows into India's equity and debt markets.

Numbers to Track:

The yield on India's 10-year benchmark federal paper fell 0.29% to 6.975 compared with previous session close of 6.995.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 94.9375 compared with its close of 95.7450 during the previous trading session.

MCX Gold futures for 5 August 2026 settlement dropped 0.86% to Rs 158,180.

The US Dollar Index (DXY), which tracks the greenback's value against a basket of currencies, was down 0.26% to 99.19.

The United States 10-year bond yield declined 0.02% to 4.476.

In the commodities market, Brent crude for August 2026 settlement lost 5 cents or 0.05% to $94.98 a barrel.

Global Markets:

European indices traded higher on Friday as investors weighed ongoing geopolitical tensions in the Middle East against signs of cooling momentum in the artificial intelligence-led market rally.

Asian shares declined sharply as investors booked profits in technology stocks and rotated into more economically sensitive sectors. South Korea's KOSPI was the worst-performing major index in the region, tumbling as much as 6% amid a steep sell-off in semiconductor shares.

Samsung Electronics and SK Hynix plunged more than 8% each in early trade before recovering some losses later in the session. The weakness in chipmakers dragged regional markets lower.

Overnight, Wall Street delivered a mixed performance. The Dow Jones Industrial Average surged to a record high, while the Nasdaq Composite slipped as investors shifted away from AI and semiconductor stocks.

The Dow climbed 874.86 points, or 1.73%, to a record close of 51,561.93. The S&P 500 advanced 0.41% to 7,584.31, while the Nasdaq edged down 0.09% to 26,830.96.

The sector rotation was triggered by a sharp decline in Broadcom shares. The stock plunged more than 12% after the company's fiscal second-quarter revenue missed market estimates. The broader semiconductor sector also came under pressure. The VanEck Semiconductor ETF fell more than 1%, while Arm Holdings dropped over 4% and Micron Technology slid nearly 8%.

Markets also remained sensitive to developments in the Middle East. Conflicting signals from ongoing negotiations to end the conflict have unsettled investors and contributed to a recent rise in oil and fuel prices.

Stocks in Spotlight:

Tata Steel fell 1.80% on media reports indicated that a fire broke out at the company's Port Talbot plant in the UK on Wednesday night, leading to a temporary suspension of operations in a section of the facility.

ACME Solar Holdings gained 3.12% after the company announced the successful completion of its Rs 2,800 crore Qualified Institutions Placement (QIP).

Bharat Heavy Electricals shed 0.58%. The company has received a notification of award (NOA) from Meja Urja Nigam (MUNPL) for the 3x800 MW Meja Supercritical Thermal Power Project Stage-II EPC package.

Lupin added 0.80%. The company announced that the United States Food and Drug Administration (USFDA) has approved its ranibizumab, Ranluspec (ranibizumab-hkdz) injection.

Juniper Hotels advanced 2.02% after the company has entered into an agreement with Juniper Hospitality Assets (JHAPL), and its seller shareholders, Arun Kumar Saraf and Varun Saraf, for the proposed transaction. The company will develop a five- Star hotel on land parcel measuring approximately 2.524 acres in Sector 23, Dwarka, New Delhi, having emerged as the successful bidder for the licence rights to the site.

Alembic Pharmaceuticals rose 0.12%. The company announced that it has received final approval from the US Food and Drug Administration (USFDA) for its abbreviated new drug application (ANDA) for Haloperidol Tablets USP in strengths of 1 mg, 2 mg, 5 mg, 10 mg, and 20 mg.

Bajaj Electricals gained 2.55% after the company announced its entry into cables category under its lighting solutions segment, aiming to capitalize on the growing demand in the cables industry.

Bluspring Enterprises surged 11.40% after it has secured a comprehensive operations and maintenance (O&M) contract from Bharat Aluminium Company (BALCO) for its 1,740 MW power plant.

Nephrocare Health Services rose 2.25% after its wholly owned subsidiary, Nephrocare Health Care Services Philippines Inc., has entered into an Asset Transfer Agreement with Inocentes Dialysis Clinic.

IPO Update:

Hexagon Nutrition received bids for 3,47,45,886 shares as against 2,16,02,008 shares on offer, according to stock exchange data at 16:45 IST on Friday (5 June 2026). The issue was subscribed 1.61 times.

The issue opened for bidding on 5 June 2026 and it will close on 9 June 2026. The price band of the IPO is fixed between Rs 42 to Rs 45 per share.

CMR Green Technologies received bids for 2,92,36,91,784 shares as against 2,30,43,930 shares on offer, according to stock exchange data at 16:45 IST on Friday (5 June 2026). The issue was subscribed 126.87 times.

The issue opened for bidding on 03 June 2026 and it will close on 5 June 2026. The price band of the IPO is fixed between Rs 182 to 192 per share.

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