The key equity benchmarks traded with significant gains in mid-afternoon trade, amid positive global sentiment following reassuring comments from US President Donald Trump regarding Fed Chair Jerome Powell and US-China trade relations. The Nifty scaled above the 24,300 level after hitting the day's low of 24,119.95 in mid-morning trade.

Auto shares witnessed buying demand for fourth consecutive trading session

At 14:25 IST, the barometer index, the S&P BSE Sensex advanced 470.78 points or 0.60% to 80,069.21. The Nifty 50 index rose 141.10 points or 0.58% to 24,308.35.

In the broader market, the S&P BSE Mid-Cap index rose 0.79% and the S&P BSE Small-Cap index added 0.15%.

The market breadth was negative. On the BSE, 1,901 shares rose and 1,966 shares fell. A total of 179 shares were unchanged.

Politics:

Prime Minister Narendra Modi returned to New Delhi on Wednesday morning, cutting short his two-day visit to Saudi Arabia, following a devastating terror attack in Jammu and Kashmir's Pahalgam.

At least 26 people, including two foreign nationals, were killed in what is being described as one of the deadliest attacks in the region in recent years. The strike occurred around 2:30 PM on Tuesday, when a group of heavily armed terrorists'disguised in military fatigues'opened fire on tourists gathered at Baisaran meadow, a popular scenic spot in Pahalgam.

The rare and brazen assault has sent shockwaves through the nation, with security forces launching a massive operation to track down the perpetrators.

Economy:

The International Monetary Fund (IMF) on Tuesday slashed India's FY26 GDP growth projection to 6.2%, down from its earlier estimate of 6.5%, citing growing global trade tensions and economic uncertainty following the United States' recent tariff imposition.

The downward revision comes as the U.S. levies a 26% tariff on imports from India, casting a shadow over India's trade outlook and prompting the IMF to temper its expectations. The FY27 growth forecast has also been dialed back to 6.3% from the earlier projection of 6.5%.

China's growth outlook for 2025 has been cut to 4%, down from 4.6%, reflecting continued challenges in its property sector and weakening global demand. Meanwhile, the U.S. economy is projected to slow to 1.8%, a sharp decline from the 2.7% forecast in the IMF's January 2025 World Economic Outlook (WEO) update.

The HSBC Flash India Composite Output Index rose to 60.0 in April 2025 as compared to 59.5 in March 2025. The Flash India Manufacturing PMI jumped to 58.4 in April 2025 as against 58.1 in March 2025, indicated the strongest improvement in the health of the sector for one year. The HSBC Flash India Services PMI business activity index stood at 59.1 in April 2025 as against 58.5 in March 2025.

Pranjul Bhandari, Chief India Economist at HSBC, said, New export orders accelerated sharply, likely buoyed by the 90-day pause in the implementation of tariffs. As a result, output and employment grew for both manufacturers and service providers. Cost inflation was in line with March levels, but prices charged rose a tad faster, leading to improved margins.

Buzzing Index:

The Nifty Auto index jumped 1.73% to 22,281.65. The index rallied 5.32% for the fourth consecutive trading session.

Tata Motors (up 4.1%), Mahindra & Mahindra (up 3.08%), Ashok Leyland (up 2.8%), Bharat Forge (up 2.33%), Hero MotoCorp (up 1.56%), Balkrishna Industries (up 1.39%), Samvardhana Motherson International (up 1.27%), Bajaj Auto (up 0.99%), TVS Motor Company (up 0.84%) and Maruti Suzuki India (up 0.7%) advanced.

Numbers to Track:

The yield on India's 10-year benchmark federal paper advanced 1.71% to 6.434 as compared with the previous close of 6.422.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 85.4825, compared with its close of 85.1925 during the previous trading session.

MCX Gold futures for the 5 June 2025 settlement were fell 1.80% to Rs 95.576

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was up 0.13% to 99.11.

The United States 10-year bond yield fell 1.05% to 4.343.

In the commodities market, Brent crude for June 2025 settlement advanced $1.10 or 1.63% to $68.54 a barrel.

Stocks in Spotlight:

Rajesh Power Services (RPSL) surged 12.93% after the company announced that it has secured new orders worth Rs 1,116 crore from a mix of government and institutional customers.

Som Distilleries & Breweries declined 1.93%. The company said that it has started dispatch of beer from the company's Karnataka Plant to the state of Tamil Nadu. This marks a significant entry into one of the largest alcohol consumption states of the country,' Som Distilleries said in a statement.

Suzlon Energy rose 0.94%. The company has announced that it has secured a 378 MW wind energy project from NTPC Green Energy, bringing its total awarded capacity from NTPC Green Energy to 1,544 MW.

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