Traders are bracing for a volatile session after India said it launched military strikes against Pakistan. Nifty futures recovered from an early drop, indicating a flat start for local stocks. Also in focus will be sectors that could gain or lose from India and the UK finalizing a free-trade agreement on Tuesday.  

Fuel retailers may extend gains on OPEC+ move

Shares of oil market companies have had a good run over the past month, and the momentum may continue following OPEC+’s decision to gradually ramp up output starting June. According to Yes Securities, OMCs like Hindustan Petroleum, Bharat Petroleum and Indian Oil stand to gain from better gross refining margins, higher marketing profitability and reduced working capital needs. Standalone refiners with complex configurations — Reliance Industries, Chennai Petroleum, and Mangalore Refinery & Petrochemicals — could see even greater upside, as they are not constrained by marketing regulations or political pricing pressures, the brokerage said.

Trump’s drug-manufacturing push may hit Indian firms 

President Trump’s latest push to bolster domestic drug production poses fresh challenges for Indian drugmakers, already on edge over potential tariff announcements. According to Nuvama, Trump’s executive orders prioritize US supply chains and limit funding for research that could enhance virus pathogenicity. While the brokerage expects generic pharma drugs to remain exempt from tariffs due to their cost benefits, it cautions that Indian firms could still face increased compliance and operational costs due to the changed policy. 

Wealthy individuals flock to large-caps amid border tensions

Despite a nearly 10% rally in the Nifty from its April lows, most mid- and small-cap shares have sat out the rebound. The market is nervous about how the situation at the border will play out, and is unable to price the risk, said Aamar Deo Singh, head of research, Angel One, referring to rising tensions between India and Pakistan. According to Singh, wealthy individuals are moving to large caps as a defensive move. They believe large caps are likely to be more resilient in the event of any negative geopolitical development, he said.

And, finally.. 

Shares of small and mid-cap companies are losing momentum as the earnings season progresses, with Tuesday’s sharp fall adding to the pressure. The Nifty Smallcap 100 index has now lost over 3% over the past four sessions, giving up a significant portion of its 13% rebound from last month’s lows. The selloff has been fueled in part by disappointing results from capital market-linked firms such as depository CDSL and Computer Age Management.

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Published on May 7, 2025