Despite the weakness in frontline indices, the broader market outperformed, with the BSE Mid-Cap and Small-Cap indices gaining 0.61% and 1.73% respectively, supported by strong domestic cues such as a favorable monsoon outlook and improving inflation and growth expectations.

In the week ended on Friday, 30 May 2025, the S&P BSE Sensex declined 270.07 points or 0.33% to settle at 81,451.01. The Nifty 50 index lost 102.45 points or 0.41% to settle at 24,750.70. The BSE Mid-Cap index added 0.61% to close at 45,136.35. The BSE Small-Cap index rallied 1.73% to end at 52,413.25.

Weekly Index Movement:

The key equity benchmarks closed sharply higher on Monday, notching up gains for the second straight session. The rally was fueled by the Reserve Bank of India's record dividend payout. The S&P BSE Sensex added 455.37 points or 0.56% to 82,176.45. The Nifty 50 index advanced 148 points or 0.60% to 25,001.15. In two trading sessions, the Sensex and Nifty have jumped 1.51% and 1.59%, respectively.

The domestic equity benchmarks declined sharply on Tuesday, ending their two-day winning streak. A mixed trend across Asian markets sparked profit booking in Indian equities. The S&P BSE Sensex tanked 624.82 points or 0.76% to 81,551.63. The Nifty 50 index slipped 174.95 points or 0.70% to 24,826.20.

Domestic equity benchmarks ended slightly lower Wednesday, weighed down by rising US Treasury yields and escalating trade tensions between the United States and the European Union. Foreign Institutional Investors (FIIs) remained largely inactive, while elevated market valuations continued to limit the scope for fresh buying. The S&P BSE Sensex slipped 239.31 points or 0.29% to 81,312.32. The Nifty 50 index fell 73.75 points or 0.30% to 24,752.45.

Domestic equity benchmarks bounced back with modest gains Thursday, halting a two-day losing run. The mood turned upbeat after a U.S. federal court struck down President Donald Trump’s proposed Liberation Day tariffs, triggering a relief rally across global markets. Back home, the session remained choppy thanks to the monthly expiry of the Nifty F&O series. The S&P BSE Sensex added 320.70 points or 0.39% to 81,633.02. The Nifty 50 index rose 81.15 points or 0.33% to 24,833.60.

The domestic equity benchmarks ended with minor losses on Friday as traders turned cautious ahead of the release of the domestic GDP data. The S&P BSE Sensex, declined 182.01 points or 0.22% to 81,451.01. The Nifty 50 index shed 82.90 points or 0.33% to 24,750.70.

Economy:

The Reserve Bank of India (RBI) on Friday handed the government a whopping Rs 2.68 lakh crore in surplus for FY25, 27% more than last year and even higher than what the Union Budget had estimated. Analysts suggest that this additional amount could support the government’s objective of reducing the fiscal deficit to 4.4% for the current financial year.

Meanwhile, India has overtaken Japan to become the world's fourth-largest economy, NITI Aayog Chief Executive Officer (CEO) BVR Subrahmanyam said, citing data by the International Monetary Fund at a press conference of the 10th NITI Aayog Governing Council Meeting on Viksit Rajya for Viksit Bharat 2047. He further stated that India may soon surpass Germany and become the third-largest economy in the world.

India's industrial output growth slowed to 2.7% in April, as against the revised growth of 3% in the preceding month of March, according to the data released by the Ministry of Statistics and Programme Implementation. Manufacturing output, which carries the largest weight in the index, advanced 3.4% in April as against 4% in the previous month, while electricity generation increased to 1.1% from 7.5% in March. Mining activity contracted by 0.2% in April from an expansion of 1.2% a month ago.

Meanwhile, foreign direct investment in India fell 24.5% year-on-year to $9.34 billion in the January-March quarter of 2024-25 but grew 13% at $50 billion during the entire previous financial year, according to the government data released on Tuesday. FDI inflows during January-March 2023-24 stood at $12.38 billion. These were $44.42 billion in the full 2023-24 fiscal. During the October-December quarter of 2024-25 also, the inflows were contracted by 5.6% year-on-year to $10.9 billion due to global economic uncertainties.

India's GDP growth touched a four-quarter high of 7.4% in Q4 FY25, with full-year growth ending at 6.5%, according to data released by the government today. The GDP growth, higher than the previous quarter of 6.4%, was lower than the 8.4% growth logged in Q4 FY24.

IMD Forecasts:

The India Meteorological Department (IMD) issued its updated Long-Range Forecast for the 2025 Southwest Monsoon season (June–September) along with the Monthly Rainfall and Temperature Outlook for June 2025. According to the forecast, the seasonal rainfall across the country as a whole is likely to be 106% of the Long Period Average (LPA), with a model error of ±4%, indicating a high probability of above-normal rainfall during the monsoon season.

Regionally, the rainfall is most likely to be above normal over Central India and the South Peninsular region, while Northwest India is expected to experience normal rainfall levels (ranging between 92-108% of LPA). In contrast, Northeast India is likely to receive below-normal rainfall (<94% of LPA).

RBI Annual Report Highlights:

The Reserve Bank of India (RBI), in its annual report, projected that the Indian economy is likely to maintain its position as the fastest-growing major economy in FY2025-26. The optimism is fueled by a pickup in private consumption, robust bank and corporate balance sheets, supportive financial conditions, and a sustained push from the government on capital expenditure.

The central bank also painted a positive inflation outlook for the coming year, citing easing global supply chain pressures, a dip in commodity prices, and the prospect of a strong agricultural output driven by an above-normal southwest monsoon.

However, the RBI cautioned that financial markets may face intermittent volatility, particularly in response to global uncertainties like shifting trade tariff policies and rising geopolitical tensions.

On the financial front, the RBI’s balance sheet grew 8.20% year-on-year to Rs 76.25 lakh crore as of 31 March 2025. While income for the year increased by 22.77%, expenditure increased by 7.76%. The year ended with an overall surplus of Rs 2.68 lakh crore as against Rs 2.10 lakh crore in the previous year, resulting in an increase of 27.37%.

The asset side of the balance sheet saw increases in gold reserves, domestic investments, and foreign investments. Domestic assets accounted for 25.73% of total assets, while foreign currency assets, gold, and other holdings made up the remaining 74.27%.

On the liabilities side, the growth was attributed to a rise in currency in circulation, revaluation accounts, and other liabilities by 6.03%, 17.32% and 23.31%, respectively.

Stocks in Spotlight:

Bajaj Auto fell 1.47%. The company’s standalone net profit rose 6% to Rs 2,049 crore, while revenue from operations increased 6% to Rs 12,148 crore in Q4 March 2025 over Q4 March 2024.

Jio Financial Services gained 1.73%. The company announced that JioBlackRock Asset Management, a 50:50 joint venture between Jio Financial Services Limited (JFSL) and BlackRock, on May 27 said it has received regulatory approval from the Securities and Exchange Board of India (SEBI) to commence operations as an investment manager for their mutual fund business in India.

Tata Motors rose 0.18%. The U.S. President Donald Trump delayed the proposed 50% tariff on EU imports to July 9. The move provided relief to its subsidiary Jaguar Land Rover, which had paused U.S. shipments last month due to trade uncertainty.

JSW Steel declined 1.46%. The Supreme Court reportedly allowed it to file a review petition against the scrapping of its Rs 19,300 crore resolution plan for Bhushan Power and Steel Ltd (BPSL). According to the media reports, the court also put BPSL's liquidation on hold, giving JSW temporary breathing room. Meanwhile, on a consolidated basis, net profit of JSW Steel rose 15.70% to Rs 1503 crore while gross sales declined 2.86% to Rs 44341 crore in Q4 March 2025 over Q4 March 2024.

NTPC tanked 2.97%. The company has reported 23.4% increase in consolidated net profit to Rs 7,611.22 crore on a 4.6% rise in net sales to Rs 49,833.70 crore in Q4 FY25 as compared with Q4 FY24.

Indusind Bank rose 2.99%. Capital markets regulator Sebi has passed an ex-parte interim order against five senior executives including former CEO Sumanth Kathpalia of IndusInd Bank in an insider trading case. The market regulator found that these individuals sold shares of the bank while in possession of unpublished price sensitive information (UPSI), avoiding losses worth nearly Rs 20 crore. In its order, Sebi has frozen the bank accounts and demat accounts of the five individuals to the extent of their gains. It has also barred them from buying or selling securities until further notice. The bank and its executives have been asked to submit a detailed account of their financial and asset holdings within 15 days.

Insecticides (India) surged 11%. The company's consolidated net profit soared 85% to Rs 13.89 crore, while revenue from operations rose 32% to Rs 358.92 crore in Q4 March 2025 over Q4 March 2024.

Global Markets:

French inflation cooled to 0.6% in May. Provisional data from Insee, France’s statistics office, pointed to annual harmonized inflation increasing by 0.6% in May It marked a slowdown from April, when French inflation rose by 0.9% on an annual basis.

German consumer sentiment improved in May. According to the GfK Consumer Climate report, sentiment rose for the third consecutive month in May, driven by easing inflation and favorable wage settlements. However, despite the improvement, overall sentiment remained low as U.S. tariff policies continued to dampen consumer willingness to spend, with many hesitant to make discretionary purchases.

German import prices fell by 0.4% year-on-year in April, according to data released by the Federal Statistical Office on Wednesday.

In March, import prices had risen by 2.1%, marking a significant contrast to the April data. The drop highlights ongoing challenges in global trade dynamics, which are being closely monitored by market participants.

In the U.K., food inflation rose by 2.8% year-on-year in May, according to the British Retail Consortium. This marks the fourth consecutive month of rising prices, up from 2.6% in April and above the three-month average of 2.6%.

China, meanwhile, offered a glimmer of optimism. Industrial profits rose 3% year-on-year in April, beating March’s 2.6% growth. For the first four months of the year, profits are up 1.4%, according to the National Bureau of Statistics.

South Korea's central bank, the Bank of Korea, cut its benchmark interest rate from 2.75% to 2.5%, marking its lowest level since August 2022.

South Korea reported a 0.9% decline in industrial production for April on a seasonally adjusted basis, following a 2.9% increase in March, according to data released by Statistics Korea.

Japan’s core consumer price index, excluding fresh food, rose 3.6% year-on-year in May, slightly higher than April’s 3.4%, according to the Statistics Bureau. The country’s unemployment rate remained unchanged at 2.5% in April.

Australia's inflation held steady at 2.4% in April, no change since February, while New Zealand's central bank surprised with a rate cut, trimming the benchmark to 3.25%.

Australia's retail sales unexpectedly declined by 0.1% in April, snapping a three-month growth streak, driven by a drop in clothing purchases, as per data released by the Australian Bureau of Statistics. The decline follows a 0.3% growth in March, adding to expectations of potential rate cuts by the Reserve Bank of Australia.

On a year-over-year basis, retail sales rose 3.8% in April, amounting to A$37.2 billion ($23.9 billion), slower than the 4.3% increase recorded in March.

U.S. federal trade court ruled that President Donald Trump exceeded his authority with his reciprocal tariffs, dealing a blow to a major tenet of the president’s economic agenda. The court ruled that Trump had overstepped his authority by imposing tariffs on over 180 countries and territories back in April.

The decision came from a three-judge panel at the US Court of International Trade. They found that the 1977 International Emergency Economic Powers Act (IEEPA), the legal crutch Trump leaned on, didn't give the president free rein to roll out such broad trade measures. The court issued a permanent halt to the tariffs named in the case and blocked any future tweaks. The Trump administration has 10 days to make the necessary changes but has already appealed the decision to the US Court of Appeals for the Federal Circuit.

On Wednesday, the U.S. Court of International Trade ruled that Trump had exceeded his authority in imposing the so-called “reciprocal” tariffs and ordered them to be vacated. In response, the Trump administration filed an appeal, and by Thursday afternoon, an appellate court reinstated the levies. The administration indicated it may approach the Supreme Court as early as Friday to pause the lower court’s decision.