Nifty trades below 23,400; Metal shares extend losses for the 3rd day
At 14:30 IST, the barometer index, the S&P BSE Sensex slipped 137.57 points or 0.18% to 74,214.44. The Nifty 50 index lost 53.02 points or 0.22% to 23,358.95.
The broader market outperformed the frontline indices. The BSE 150 MidCap Index shed 0.05% and the BSE 250 SmallCap Index declined 0.09%.
The market breadth was negative. On the BSE, 1,965 shares rose and 2,152 shares fell. A total of 214 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
The government has announced a series of reforms to attract long-term foreign capital and deepen India's capital markets, 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 01 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.
Buzzing Index:
The Nifty Metal Index fell 1.96% to 13,172.20. The index dropped 2.84% in three consecutive trading sessions.
Hindustan Zinc (down 5.94%), National Aluminium Company (down 5.37%), Vedanta (down 4.18%), Steel Authority of India (down 4.08%), NMDC (down 3%), Hindalco Industries (down 2.81%), Hindustan Copper (down 2.48%), Tata Steel (down 2.47%), JSW Steel (down 2.43%) and Jindal Steel (down 1.75%) decined.
On the other hand, APL Apollo Tubes (up 1.21%), Adani Enterprises (up 1.02%) and Lloyds Metals & Energy (up 0.25%) edged higher.
Numbers to Track:
The yield on India's 10-year benchmark federal paper fell 1.02% to 6.924 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 95.0300 compared with its close of 95.7450 during the previous trading session.
MCX Gold futures for 5 June 2026 settlement dropped 0.90% to Rs 158,116.
The US Dollar Index (DXY), which tracks the greenback's value against a basket of currencies, was down 0.16% to 99.22.
The United States 10-year bond yield declined 0.27% to 4.465.
In the commodities market, Brent crude for July 2026 settlement lost 64 cents or 0.67% to $94.39 a barrel.
Stocks in Spotlight:
Bajaj Electricals advanced 2.07% after the company announced its entry into cables category under its lighting solutions segment, aming to capitalize on the growing demand in the cables industry.
Bluspring Enterprises rose 2.07% after it has secured a comprehensive operations and maintenance (O&M) contract from Bharat Aluminium Company (BALCO) for its 1,740 MW power plant.
Juniper Hotels gained 2.32% after the company signed a share purchase agreement (SPA) to develop a five-star hotel project in Dwarka, New Delhi.
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