On May 6, 2025, the Indian stock market experienced a downturn, with both the Nifty 50 and Sensex marking a decline due to losses in the broader market, particularly in the pharmaceutical sector. This dip followed U.S. President Donald Trump’s recent order aimed at enhancing domestic drug production, which unsettled traders. While auto stocks, notably led by Mahindra & Mahindra, attempted to stabilize the market, they ultimately fell short, ending the two-day winning streak for both indices.

Market Sentiment Affected by Global Events

Investor sentiment was further dampened by a weak performance from Wall Street, which broke its nine-day winning streak. Traders are currently navigating uncertainties surrounding global trade dynamics while awaiting a crucial policy decision from the U.S. Federal Reserve later this week. Additionally, rising tensions between India and Pakistan, highlighted by India’s planned mock civil defense drills, added to the market’s apprehensive mood.

• Nifty 50: Down by 0.33% to 24,379
• Sensex: Decreased by 0.19% (155 points) to 80,641
• Nifty Midcap 100: Plummeted by 2.27% to 53,435
• Nifty Smallcap 100: Fell 2.50% (394 points) to 16,195

Notably, the Nifty PSU Bank index saw a significant drop of 4.84%, leading the declines across most sectors, except for the Nifty Auto, which remained relatively stable.

CCL Products Shines Amidst Market Decline

In a contrasting performance, CCL Products emerged as a standout gainer within the Nifty 500 stocks, reporting record quarterly net profit and revenue for Q4 FY25. This impressive financial performance exceeded analyst expectations and propelled the stock price up by 16%.

According to recent reports from CNBC, the Trump administration is reportedly nearing several trade deals, with Treasury Secretary Scott Beseent suggesting that tariff agreements could materialize as soon as this week. This has fueled investor optimism, particularly regarding potential trade agreements between India and the U.S., contributing to recent surges in the Indian equity market.

Economic Outlook and Geopolitical Risks

In its latest report, Moody’s Ratings adjusted India’s GDP growth forecast for 2025 down to 6.3% from 6.5%, citing global economic slowdowns attributed to U.S. policy uncertainties and escalating trade barriers. The report also flagged geopolitical tensions, especially those between India and Pakistan, as potential risks to economic growth.

• Nifty Pharma Index: Declined by 1.8% amid ongoing concerns regarding U.S. tariffs.

In the commodities market, crude oil prices saw a rebound after experiencing significant intraday losses, following OPEC+‘s decision to continue ramping up output for an additional month.

Technical Insights

Vatsal Bhuva, a Technical Analyst at LKP Securities, noted that the Nifty 50 closed with a bearish candlestick pattern on its daily chart. This indicates strong resistance around the 24,500 mark, as investors remain cautious ahead of the Federal Reserve’s meeting and the ongoing tensions between India and Pakistan. Key support levels are identified in the 24,250–24,200 range. Bhuva emphasized that a clear directional trend will emerge only if the index surpasses 24,500 or drops below 24,200. Until then, fluctuations within this range are anticipated, with a potential directional shift expected after the Fed’s announcement.

By keeping an eye on these developments, investors can navigate the complexities of the market and make informed decisions in the coming days.