Indian stock markets witness 2nd consecutive week of consolidation

• MUMBAI — Indian stock markets ended the week on a cautious note, marking the second consecutive week of consolidation. This subdued performance came amid ongoing global trade tensions and anticipation surrounding domestic policy developments, analysts said on Saturday.
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• The benchmark indices, Sensex and Nifty, witnessed notable volatility through the week, eventually closing lower as investors reacted to uncertainties over U.S. tariff developments and awaited the Reserve Bank of India’s (RBI) upcoming monetary policy decision. By the end of the week, the Nifty settled at 24,750.70, while the Sensex closed at 81,451.01.
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• “Despite encouraging domestic cues, mixed signals from global markets kept investor sentiment on edge. Initially, optimism prevailed following the RBI’s record dividend payout and positive updates regarding the monsoon,” said Ajit Mishra, SVP, Research, Religare Broking Ltd.
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• Sectoral performance remained mixed in line with the overall market consolidation. The realty index extended its winning streak for the third consecutive week, while banking and energy sectors also ended in the green.

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• Conversely, FMCG, auto, and metal stocks underperformed and emerged as top laggards. Among the broader markets, both the midcap and smallcap indices managed to register gains of nearly 1.5 per cent each despite the choppy trading environment.
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• According to Vinod Nair, Head of Research, Geojit Investments Ltd, a fair share of trade tensions with the temporary pause and the subsequent reinstatement of US President Donald Trump's reciprocal trade policies reiterate that the global market may contend with macroeconomic concerns, which may continue to create ripple effects in the emerging markets.
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•  “The domestic economic indicators are favourable, like a better monsoon forecast, a benign inflation trajectory, and pleasant Q4 GDP growth of 7.4 per cent, which may protect the downside. The market is pricing in a 25bps cut, which will improve the outlook for rate-sensitive sectors,” Nair mentioned.
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• Looking ahead, all eyes will be on the outcome of the RBI’s Monetary Policy Committee (MPC) meeting scheduled for June 6. The central bank’s stance on the rate trajectory, especially amid mixed macroeconomic signals, will be critical in shaping market direction.
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• Additionally, with the new month beginning, participants will track high-frequency data including auto sales numbers and other economic indicators. Updates on the progress of the monsoon and the trend in foreign institutional investor (FII) flows will also be closely monitored.
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• Globally, developments in the U.S. bond market and any updates regarding ongoing trade negotiations will continue to influence investor sentiment, said analysts.