Benchmarks Extend Losses Amid West Asia Tensions and Foreign Selling

An end-of-day recap of all that transpired in the Indian markets, highlighting the major price movements and the factors driving them

India stocks fall, rupee fall

By Dehuti Jani

June 1, 2026 at 11:36 AM IST

Indian equity benchmarks extended their losing streak on Monday as renewed tensions in West Asia, persistent foreign selling and concerns over a weak monsoon weighed on investor sentiment. The Nifty50 declined 0.70% or 165.15 points to close at 23,382.60, while the BSE Sensex fell 0.68% or 508.40 points to settle at 74,267.34.

Markets remained under pressure after fresh military exchanges between the US and Iran despite ongoing negotiations aimed at ending the three-month conflict in West Asia. Reports that Iran’s Revolutionary Guards targeted a US base in response to American strikes on Iranian military sites added to geopolitical uncertainty and kept investors cautious.

Sentiment was also hurt by heavy foreign outflows following MSCI’s latest index rebalancing, with overseas investors reportedly selling a record $2.22 billion worth of Indian equities on Friday. Rising Brent Crude prices and concerns around the monsoon outlook further pressured domestic equities.

Sectorally, FMCG, PSU banks, auto and realty stocks underperformed, while selective strength was visible in IT, metal and media shares. Hindustan Unilever, Shriram Finance and Tata Consumer Products were among the top losers on the Nifty50 index. Broader markets also weakened, with the Nifty MidCap and Nifty SmallCap indices falling 1.45% and 0.88%, respectively.

Investors also monitored comments from Donald Trump, who reiterated that Washington was seeking an agreement ensuring Iran would never acquire nuclear weapons, although he indicated that negotiations would not be rushed.

Top Movers of the Day

Tech Mahindra jumped 3.71% to roughly ₹1,539 after leading gains in the IT basket, as investors rotated into export‑oriented tech on hopes that AI‑driven demand and a softer rupee will support earnings.

Infosys rose nearly 4% to around ₹1,203, emerging as the biggest positive contributor to the Nifty as stronger sentiment towards large‑cap IT and bargain hunting helped offset broader market weakness.

TCS gained about 1.6% to approximately ₹2,296 after a broad rally in frontline IT names, with the stock benefitting from its defensive cash‑flow profile and renewed interest in AI‑linked service providers.

InterGlobe Aviation (IndiGo) advanced over 1% to roughly ₹4,460 as the stock extended its post‑results rally, with multiple global brokerages reiterating bullish calls despite Q4 losses and highlighting resilient pricing and capacity growth.

Coal India climbed over 3% to about ₹473 even as May output fell 11.6% year‑on‑year, with traders focusing instead on higher offtake and strong cash generation that continue to underpin the dividend story.

NMDC Steel rallied more than 13% to around ₹50.75 after the company swung back to profit in Q4 FY26, with strong revenue growth and margin recovery propelling the stock to a record high.

Zee Entertainment Enterprises added about 1% to nearly ₹94, extending a five‑session winning streak as the broadcaster’s market value swelled on the back of securing FIFA World Cup 2026 broadcast rights for India and short covering in the counter.

Wockhardt rose 5.25% to roughly ₹2,138 after winning US FDA approval for a key antibiotic targeting drug‑resistant infections, fuelling hopes of a step‑up in high‑value export revenues.

Suzlon Energy slipped about 6% to around ₹53.75 after the regulator-imposed penalties of nearly ₹2.9 billion for misleading financial statements, reviving governance concerns and pressuring the recently strong stock.

IREDA fell over 5% to about ₹126.13 as a marginal year‑on‑year decline in Q4 profit and some profit‑taking saw investors reassess valuations in the renewable‑financing NBFC following a strong post‑listing run.

Futures & Options
Nifty June 2026 futures closed at 23,459.90, a premium of 77.30 points over the spot Nifty 50 close of 23,382.60, indicating that traders maintained selective long positioning despite weakness in the broader market. In the cash market, the Nifty 50 declined 165.15 points or 0.70%, while volatility increased further with India VIX rising 2.20% to 16.54 amid elevated geopolitical uncertainty and foreign selling pressure.

Among stock futures, HDFC Bank, Coal India and Infosys were the most actively traded contracts in the F&O segment of the NSE. The June 2026 derivatives series will expire on 30 June 2026.

Bonds
India’s government bond yields yields moved higher on Monday as rising crude oil prices and continued uncertainty in West Asia kept investors cautious ahead of the Reserve Bank of India’s upcoming monetary policy decision. The benchmark 6.48% 2035 government bond yield rose during the session before easing slightly to close at 7.0181%, compared with Friday’s close of 7.0037%. Traders said state-owned banks increased purchases around the 7.03% yield level, helping limit further losses in the bond market.

Sentiment remained pressured after Brent Crude prices climbed nearly 3% toward $93.6 per barrel amid intensified attacks in Lebanon and broader geopolitical tensions in West Asia. Higher oil prices continued to fuel concerns around imported inflation and India’s fiscal outlook.

Investor positioning also remained cautious ahead of Friday’s Reserve Bank of India monetary policy review, where markets largely expect the repo rate to remain unchanged, although traders increasingly anticipate a tighter policy stance due to inflation risks.

Forex
Indian rupee ended nearly unchanged on Monday as gains linked to MSCI index rebalancing-related flows were offset by continued corporate hedging demand and rising oil prices. The rupee closed at 94.99 against the US dollar, little changed from Friday’s close of 95.00. Traders said the currency initially strengthened after dollar sales from foreign and state-run banks, although the momentum faded later in the session.

Market participants noted that inflows related to MSCI’s equity index rebalancing helped cushion the impact of higher Brent Crude prices, which rose around 3% toward $93.8 per barrel.

Crypto
Crypto markets remained under pressure at the start of June as geopolitical tensions and broader macroeconomic uncertainty continued to weigh on risk assets, although Bitcoin continued to outperform the broader digital asset market. Bitcoin traded in the $73,000-$76,000 range after a sharp correction from recent highs, while maintaining a market capitalisation above $1.4 trillion. Investors continued to favour Bitcoin during periods of uncertainty, viewing it as relatively more resilient compared with smaller cryptocurrencies and speculative altcoins.

Ethereum traded near $1,982 and remained weaker relative to Bitcoin despite continued strength in its broader blockchain ecosystem and decentralised finance activity.

Meanwhile, Coinbase announced direct deposit and withdrawal support through Indian banking rails for retail investors in India. The integration of the Immediate Payment Service (IMPS) will allow Indian users to directly deposit and withdraw rupees from bank accounts, reducing reliance on peer-to-peer transactions and intermediaries previously used for crypto funding and withdrawals.

US Stock Futures
US stock futures traded higher early Monday as Wall Street looked set to begin June on a strong footing following fresh record highs at the end of last week. Futures linked to the S&P 500 and Nasdaq-100 gained around 0.3%, while futures tied to the Dow Jones Industrial Average rose roughly 0.4% or more than 200 points.

Markets also monitored comments from Donald Trump, who said he would meet advisers in the Situation Room to make a “final determination” on the agreement while reiterating that Iran must never obtain nuclear weapons. He also called for the Strait of Hormuz to reopen immediately, a development closely watched by energy and financial markets.

US Treasury Notes
US Treasury yields moved slightly higher on Monday as renewed geopolitical tensions in West Asia and rising oil prices revived inflation concerns across global markets. The benchmark 10-year Treasury yield rose to around 4.465%, while the policy-sensitive 2-year Treasury yield advanced to roughly 4.037%. Investors reacted to renewed military exchanges between the US and Iran near the Strait of Hormuz, which weakened hopes for a lasting ceasefire agreement.

The rebound in Brent Crude prices added to inflation worries, prompting cautious positioning across fixed-income markets. Traders also continued to assess the outlook for Federal Reserve policy amid persistent price pressures.

Top News