Early Gains Erased as Market Sentiment Dips on Mixed Global Cues

July 2, 2025 | Mumbai – Domestic equity markets opened the midweek session on a flat note, only to retreat swiftly as investor optimism gave way to caution. The BSE Sensex began trading at 83,790.72, marginally above its previous close, but declined sharply to 83,486 by 11:14 am, down 210 points or 0.25%. Similarly, the Nifty 50 started the day at 25,588.30, but slipped to 25,476, reflecting a 65-point drop or 0.26%. While early buying was seen in select IT stocks following global cues around potential U.S. Federal Reserve rate cuts, broader market participation remained tepid. As traders responded to softer-than-expected PMI data from Europe and subdued commodity prices, defensive positioning returned, dragging down banking, realty, and capital goods sectors.

Highlights

• Sensex dropped 210 points from opening highs, down 0.25% intraday.

• Nifty slipped 65 points to trade at 25,476.

• Early IT gains failed to sustain broader momentum.

• Weak global manufacturing data and commodity softness weighed on sentiment.

Also Read : RBI Likely to Retain 4% Inflation Target Amid Policy Framework Review

Financial Stocks Lead Decline as Nifty Bank Slides Over 1%

The Nifty Bank index witnessed intensified selling pressure by mid-session, falling over 1% as major constituents reported heavy intraday losses. IndusInd Bank was among the steepest decliners, shedding 2.28% to trade at ₹859.05, followed by AU Small Finance Bank and Bank of Baroda, down 2.18% and 1.88%, respectively. Analysts attribute the downturn to investor unease over rising NPAs in the MSME segment and concerns over muted credit growth during Q1 FY26. Furthermore, reports of SBI likely declaring Reliance Communications’ account as ‘fraud’ further dampened sentiment, with shares of the state-run lender falling over 1%. The news has also reignited discussions on governance oversight in legacy telecom debt restructuring.

Highlights

• Nifty Bank fell over 1%, with IndusInd, AU Small Finance, and BoB among top losers.

• SBI down over 1% on reports of impending fraud classification of Reliance Comm account.

• Sector dragged by credit quality concerns and Q1 FY26 growth anxiety.

• Market cautious on public sector banks amid regulatory headlines.

IT Stocks Offer Temporary Support Amid Fed Rate Cut Expectations

Information technology shares offered brief intraday relief, buoyed by renewed bets on a U.S. Federal Reserve interest rate cut following dovish statements from senior officials. Wipro rose marginally by 0.19% to ₹264.95 amid block trade activity involving 1.31 million shares, while HCLTech also gained on reports of expanded digital collaboration with Equinor, Europe’s leading energy firm. The HCLTech-Equinor deal is expected to generate long-term annuity revenues and deepen the Indian firm’s exposure in European energy digitisation. While the sector outperformed broader indices, analysts remain cautious due to persistent volatility in U.S. tech budgets and client spending cycles across BFSI and healthcare verticals.

Highlights

• Wipro trades flat amid block deal, HCLTech gains on Equinor partnership.

• Market prices in potential Fed rate cut based on global macro signals.

• IT outperforms broader markets but remains exposed to client-side risks.

• Short-term momentum driven by global liquidity themes.

Metals and Cement Stocks Outperform as Infrastructure Demand Holds

In contrast to banking and realty, metal and cement counters saw notable intraday gains, driven by firm infrastructure demand data and better-than-expected June volume reports. Tata Steel, JSW Steel, and UltraTech Cement led the pack, rising over 1% each. Maruti Suzuki and Hero MotoCorp also advanced as auto dealers reported higher showroom footfalls ahead of the monsoon season. The metal index gained 1%, bucking the market trend, as global steel futures remained resilient amid steady Chinese industrial activity. The momentum reflects investor preference for sectors with tangible demand drivers amid market-wide ambiguity over interest rate trajectories and earnings surprises.

Highlights

• Metal and cement stocks gain on infrastructure optimism and strong June volumes.

• Tata Steel, JSW Steel, UltraTech Cement lead sectoral advances.

• Auto stocks rally on improved footfalls and rural demand prospects.

• Sector rotation seen from banks to cyclicals with clear demand visibility.

Nazara Technologies Expands E-Sports Portfolio With AFK Gaming Acquisition

In a key corporate development, Nodwin Gaming, a subsidiary of Nazara Technologies, announced the acquisition of a 92.3% stake in AFK Gaming, consolidating its dominance in the Indian esports and content segment. The transaction, involving founders Nishant Patel and Siddharth Nayyar among others, makes AFK a wholly owned step-down unit under Nazara’s expanding gaming empire. Industry watchers see this move as a strategic play to capture monetisation opportunities in content creation, tournament IPs, and influencer-led gaming formats amid rising mobile gaming penetration in India. Nazara’s broader M&A strategy continues to align with its vision of building a diversified gaming and media conglomerate across emerging markets.

Highlights

• Nodwin Gaming acquires 92.3% of AFK Gaming, now fully owned under Nazara.

• Strengthens Nazara’s footprint in India’s esports content ecosystem.

• Aligns with the company’s vision of gaming-focused M&A in emerging markets.

• Acquisition seen as key step in monetising digital gaming audiences.