Indian benchmarks end May with gains as investors wait for growth data
India's benchmark indexes edged lower on Friday but logged a third straight monthly gain, supported by steady institutional inflows and earnings momentum despite geopolitical and trade concerns.
The Nifty 50 rose 1.7% in May to 24,750.70, while the BSE Sensex gained 1.5% to 81,451.01; both indexes are up around 12% since March but remain about 6% below their September 2024 record highs.
Domestic growth data, due after markets close, likely picked up pace in the January–March quarter, driven by stronger rural demand and increased government spending.
Markets wavered early in May following a flare-up in tensions with Pakistan but rebounded after both nations agreed to a ceasefire.
'The de-escalation eases some of the foreign investor concerns, paving the way for sustained inflows,' said Matt Gertken, chief geopolitical strategist at BCA Research.
FPIs bought about $2.6 billion worth of Indian shares in May, the highest since September 2024.
Financials, IT stocks weigh on Indian equity benchmarks
Global sentiment improved as the U.S. reached a 90-day tariff truce with China and advanced trade negotiations with the U.K.
Talks between India and the U.S. also progressed, with New Delhi aiming to clinch a deal during the truce period.
'The trajectory now hinges on corporate earnings, economic growth data after market close, and the RBI's upcoming policy decision next week,' said Anil Rego, founder of Right Horizons PMS.
The broader small-caps and mid-caps jumped 8.7% and 6.1%, respectively.
On Friday, the Nifty fell 0.33% and Sensex lost 0.22% as the Nifty IT dropped after a U.S. court reinstated broad Trump-era tariffs. Still, the IT index ended May higher, while metals also posted strong gains.
Among individual stocks, Bharat Electronics jumped 22.5% in May, its best in a year, helped by the government's defence indigenisation push and strong March quarter earnings.
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