Peace efforts in West Asia appear to have stalled, though markets have not entirely given up hope. Investor attention is now focused on talks expected between US President Donald Trump and Chinese President Xi Jinping after Trump’s arrival in China tomorrow.
Concerns over slowing economic growth and rising inflation are weighing heavily on global markets. Crude oil prices have surged above $107 a barrel, fuelling speculation of a fresh fuel price hike. India has also sharply increased import duties on gold and silver, signalling the beginning of tighter economic measures.
Gift Nifty, in derivative trading at Gift City, closed at 23,370 on Tuesday night. It slipped to 23,269 in early trade before recovering to 23,498 and later easing again, indicating that the Nifty may open marginally higher today.
Inflation is rising to levels that could hurt economic growth. India’s retail inflation accelerated to 3.48 percent in April from 2.74 percent in January. Food inflation climbed to 4.2 percent during the month.
Fuel prices rose only 0.7 percent in April, but if domestic fuel prices are revised upwards, inflation could cross 4 percent next month. Rising inflation may force the Reserve Bank of India to raise interest rates.
US retail inflation for April rose to 3.8 percent, above market expectations. This has increased speculation that incoming Federal Reserve chairman Kevin Warsh could begin his tenure with an interest rate hike. Any rate increase by the US Federal Reserve may compel the RBI to tighten rates further to support the rupee.
The government has sharply increased import duties on gold and silver. Basic customs duty on both metals has been raised from 6 percent to 10 percent, along with a 5 percent Agriculture Infrastructure and Development Cess, taking the effective tax incidence to 15 percent.
The move is aimed at discouraging imports. Import duties on platinum and other precious metals and their products have also been increased to 10 percent. The duty hike will apply even to gold imports from the UAE under the free trade agreement quota.
India spent $71.98 billion on gold imports in the last financial year, up 24 percent largely due to higher prices. However, import volumes fell 4.76 percent to 721 tonnes in 2025-26.
Stalled peace initiatives in West Asia kept US markets volatile. The S&P 500 and Nasdaq recovered significantly after falling more than 1 percent during the session.
The Dow Jones gained 56.09 points, or 0.11 percent, to close at 49,760.56. The S&P 500 fell 11.88 points, or 0.16 percent, to 7,400.96, while the Nasdaq dropped 185.92 points, or 0.71 percent, to 26,088.20.
US futures were marginally higher this morning, with Dow futures up 0.02 percent, S&P futures 0.12 percent and Nasdaq futures 0.24 percent.
Indian ADRs traded lower in New York on Tuesday.
HDFC Bank ADR fell 0.66 percent in regular trade before recovering 1.91 percent in after-hours trading to $24.50.
ICICI Bank ADR declined 1.23 percent and slipped another 1.09 percent in extended trading to $25.50.
Infosys ADR dropped 2.03 percent before edging up 0.33 percent after-hours to $12.09. Wipro fell 2.11 percent before recovering 0.52 percent to close at $1.87.
European markets closed more than 1 percent lower on Tuesday amid concerns over West Asia and inflation.
Asian markets also remained under pressure today. Japan’s Nikkei fell around 0.5 percent, South Korea’s Kospi dropped 2 percent and Australia’s benchmark index declined 0.8 percent. Hong Kong and Shanghai markets also opened lower.
Indian equities continued their sharp decline on Tuesday amid fears of fuel price hikes and tighter economic controls. Benchmark indices ended nearly 2 percent lower, while the broader market fell even more sharply.
Realty, IT, consumer durables, oil, auto, banking, financials, pharma and healthcare stocks saw heavy selling.
Jewellery stocks extended losses. Titan Company, Kalyan Jewellers, PN Gadgil, Senco, Thangamayil, Goldiam, TBCZ and Sky collectively declined up to 14 percent over the past two sessions.
Airline stocks such as IndiGo and SpiceJet also declined as higher crude prices raised cost concerns. Tourism, travel and defence shares were among the major losers.
Foreign institutional investors remained net sellers, offloading shares worth ₹1,959.39 crore in the cash market, while domestic institutions bought shares worth ₹7,990.32 crore.
The Sensex plunged 1,456.04 points, or 1.92 percent, to close at 74,559.24. The Nifty 50 fell 436.30 points, or 1.83 percent, to 23,379.55. Bank Nifty dropped 884.70 points, or 1.63 percent, to 53,555.20.
The mid cap 100 index declined 2.54 percent to 59,704.65, while the small cap 100 index tumbled 3.11 percent to 17,939.
Market breadth remained extremely weak. On the BSE, 782 stocks advanced while 3,500 declined. On the NSE, 584 stocks gained and 2,709 fell.
Tata Power reported a 12.8 percent decline in fourth-quarter revenue and a 4.5 percent fall in net profit. Operating margin narrowed to 17.4 percent from 19 percent.
Torrent Power reported a marginal fall in revenue and a 70 percent decline in net profit.
Dr. Reddy's Laboratories posted a 12 percent fall in fourth-quarter revenue, while net profit plunged 86.2 percent. Margin dropped to 13 percent from 29.1 percent.
Dixon Technologies reported only 2 percent revenue growth, while operating profit declined 7.8 percent. Margin slipped to 3.9 percent from 4.3 percent.
Berger Paints reported 6.1 percent revenue growth and a 27.8 percent jump in net profit. Margin improved to 16.8 percent from 15.8 percent.
Vodafone Idea board will meet on May 16 to consider a share sale proposal and financial results.
Gold prices remained volatile as peace efforts in West Asia weakened. Gold traded between $4,637 and $4,774 an ounce on Tuesday before closing $20.10 lower at $4,716.40. Prices slipped further to around $4,708 this morning.
In Kerala, 22-carat gold prices rose ₹400 per sovereign on Tuesday to ₹1,12,920.
Silver closed at $86.84 an ounce and rose to $87.24 this morning. Platinum stood at $2,117, palladium at $1,477 and rhodium at $9,500.
Industrial metals mostly advanced on Tuesday. Copper surged 1.45 percent to a record $13,871.50 a tonne, surpassing the previous high of $13,843.40 amid supply concerns.
Aluminium rose 0.21 percent to $3,565.90. Zinc, lead and tin also gained, while nickel weakened.
Rubber prices fell for a second straight day in Bangkok. RSS-3 declined $7.55 per quintal to $295.75, while RSS-1 stood at $299.30.
Kerala rubber prices fell more than 1 percent yesterday. Synthetic rubber declined 1.09 percent to 15,875 yuan a tonne.
Coffee prices slipped 0.36 percent to 281.27 cents per pound. Palm oil fell to 4,481 Malaysian ringgit per tonne.
After a sharp rally earlier, cocoa prices eased 2.41 percent to $4,595.29 a tonne. Ghana is preparing a $1 billion cocoa stockpiling plan.
Although rains have resumed in Ivory Coast and Ghana, concerns persist that prolonged drought has damaged bean quality and supply. Rising fertiliser prices and the El Niño effect are also expected to hurt output in coming months. Cocoa’s record high remains the $12,906 per tonne touched in December 2024.
The US dollar index rose to 98.30 on Tuesday and moved slightly higher to 98.36 this morning.
The euro weakened to $1.1734, while the pound slipped to $1.3531. The Japanese yen weakened to 157.65 against the dollar, while the Chinese yuan traded at 6.80 per dollar.
US 10-year Treasury yields rose to 4.469 percent this morning.
The rupee weakened further on Tuesday amid rising crude prices and calls to curb imports. The dollar climbed 31 paise to close at ₹95.62, the rupee’s weakest-ever closing level. During the session, it touched ₹95.73.
In the offshore NDF market this morning, the dollar traded at ₹95.57. The yuan strengthened to ₹14.08 and the euro to ₹112.29, adding pressure on the rupee.
Persistent tensions in West Asia pushed crude oil prices sharply higher on Tuesday.
Brent crude rose close to $108 a barrel before settling at $107.77. It eased slightly to $107.02 this morning. WTI crude stood at $101.62, while UAE Murban crude traded at $106.
Cryptocurrencies continued to weaken. Bitcoin slipped below $81,000 this morning, while Ether traded below $2,290 and Solana below $94.5.
Sensex: 74,559.24 (-1.92%)
Nifty 50: 23,379.55 (-1.83%)
Bank Nifty: 53,555.20 (-1.63%)
Mid cap 100: 59,704.65 (-2.54%)
Small cap 100: 17,939.00 (-3.17%)
Dow Jones: 49,760.56 (+0.11%)
S&P 500: 7,400.96 (-0.16%)
Nasdaq: 26,088.20 (-0.71%)
Dollar: ₹95.62 (+₹0.31)
Gold (ounce): $4,716.40 (-$20.10)
Gold (sovereign): ₹1,12,920 (+₹400)
Brent crude: $107.77 (+$3.56)