Benchmarks Slip Despite RBI Support Measures; Rupee Rallies

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

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By Dehuti Jani

June 5, 2026 at 11:41 AM IST

Indian equity benchmarks lower on Friday after a volatile session as investors assessed the Reserve Bank of India’s policy decision, revised macroeconomic forecasts and a series of measures aimed at supporting the rupee and attracting foreign capital. The Nifty50 fell 0.21% or 49.85 points to close at 23,366.70, while the BSE Sensex declined 0.16% or 116.67 points to settle at 74,243.34.

The RBI kept the repo rate unchanged at 5.25% and maintained its neutral stance, as widely expected, but raised its FY27 inflation forecast to 5.1% from 4.6% and lowered GDP growth projections to 6.6% from 6.9%, citing rising risks from elevated oil prices, geopolitical tensions in West Asia and expectations of a weaker monsoon. Markets initially gained after the policy announcement before turning lower as investors focused on the central bank’s cautious outlook.

The rupee posted its strongest single-session gain in nearly two months after the RBI unveiled measures to improve foreign participation in domestic financial markets, including expansion of the fully accessible route for government securities. The government also exempted foreign investors from capital gains tax on interest earned from government bonds in a move aimed at improving inflows and stabilising the currency.

Sectorally, IT and metal stocks led the declines, while media shares outperformed. Hindalco Industries, Wipro and Trent were among the top losers on the Nifty50. Broader markets were subdued, with the Nifty MidCap and Nifty SmallCap indices falling 0.35% and 0.06%, respectively.

Top Movers of the Day

Adani Green Energy surged about 7% to roughly ₹1,522, its strongest rise in around eight weeks, as risk appetite returned to select renewables names and Adani group stocks, with volumes swelling well above recent averages.

Adani Ports advanced about 1.9% to roughly ₹1,826, extending its uptrend after recent positive brokerage commentary on cargo growth and return ratios, with the stock consolidating near record highs as integrated logistics and port expansion remain key triggers.

Bajaj Finance gained close to 1.7%, at ₹889.55, as a stable rate outlook from the RBI and a neutral stance reinforced comfort around funding costs for high‑growth retail lenders.

Axis Bank rose nearly 1.6% to about ₹1,273.30, helping Bank Nifty stay resilient on a policy day as traders rotated into quality private banks expected to benefit from steady credit growth and unchanged repo rates.

Hindustan Unilever rallied a little over 2% to roughly ₹2,121, topping the Nifty gainer list as investors sought defensives in FMCG, with steady cash flows and volume‑led growth strategies offsetting worries about higher input costs.

Bluspring Enterprises jumped roughly 11% to about ₹92.85 after its step‑down subsidiary STEAG Energy Services (India) won a ₹2,049.8 crore operations and maintenance contract for a 1,740 MW power plant from Bharat Aluminium Company, triggering a spike in volumes more than six times the five‑day average.

Rites rallied close to 5% in early trade to ₹209.65 as strong buying interest in rail and engineering PSUs continued, with the stock featuring among the top opening‑hour gainers on both exchanges.

Zee Entertainment climbed nearly 7% to ₹112, helping the Nifty Media index outperform with a gain of over 2–3% as media and broadcasting stocks drew fresh interest after a long phase of underperformance.

Hindalco Industries slid about 3% to ₹1,092 emerge as one of the worst Nifty laggards, as metals continued to face pressure from global growth worries, soft base‑metal prices and risk‑off flows into cyclicals.

Wipro dropped nearly 3% to around ₹198, extending its IT‑sector underperformance and also reacting to fresh negative news flow after an ex‑employee alleged religious harassment, which added to selling pressure in the counter.

Tata Steel fell close to 2% to about ₹206.80 after a fire at its Port Talbot plant in the UK forced a temporary shutdown at part of the site, stoking concerns about near‑term operational disruption and weighing further on already weak metal sentiment.

Futures & Options
Nifty June 2026 futures closed at 23,440, a premium of 73.30 points over the spot Nifty 50 close of 23,366.70, indicating cautious long positioning after the RBI policy outcome and continued geopolitical uncertainty. In the cash market, the Nifty 50 declined 49.85 points or 0.21% to 23,366.70. Meanwhile, India VIX eased 0.61% to 15.79, suggesting slightly lower near-term volatility expectations despite weak broader sentiment.

Among individual stock futures, HDFC Bank, SBI and Reliance Industries emerged as the most actively traded contracts in the NSE F&O segment. The June 2026 F&O contracts will expire on 30 June 2026.

Bonds
India’s government bond benchmark yield fell below the 7% mark on Friday after the RBI announced measures to attract foreign investment into government securities and reiterated its commitment to maintaining adequate system liquidity. The benchmark 6.48% 2035 bond yield ended at 6.9772%, lower than the previous close of around 6.9931%. Traders said sentiment improved after the RBI widened access for foreign investors and introduced supportive external financing measures alongside its policy decision.

However, gains in bond prices were capped as traders booked profits when the benchmark yield approached the 6.95% level intraday. Market participants largely ignored the RBI’s upward revision in the FY27 CPI inflation forecast to 5.1% from 4.6%, saying higher crude oil prices and geopolitical risks had already been priced in.

Short-term government securities outperformed amid expectations that liquidity conditions would remain comfortable. Among on-the-run securities, the 6.36% 2031 bond yield declined 17 basis points to 6.63%.

Meanwhile, the government’s ₹340 billion auction of the new 6.94% GS 2036 bond saw strong demand. The paper was sold at a cut-off yield of 6.9686%, with bids worth ₹737.26 billion received against the notified amount of ₹340 billion.

Forex
Indian rupee posted its strongest single-day gain in more than two months on Friday after the Reserve Bank of India announced a series of measures to attract foreign capital and support the external sector. The rupee settled at 94.9450 against the US dollar compared with 95.7850 in the previous session. The currency opened at 95.71 and strengthened sharply through the day to an intraday high of 94.88 before trimming some gains toward the close. The rupee advanced around 0.9% during the session, marking its biggest rise since Apr 2.

The rally followed the RBI’s monetary policy decision, where the central bank kept the repo rate unchanged at 5.25% and retained its neutral stance, while simultaneously unveiling measures aimed at boosting foreign inflows. These included wider access for overseas investors to government securities, concessional foreign exchange swap facilities for public sector borrowings and support for banks mobilising foreign currency deposits.

Crypto
Crypto markets remained under heavy pressure on Friday, with the global crypto market capitalisation falling 2.61% to around $2.48 trillion amid continued risk aversion and persistent ETF outflows. Bitcoin traded near $62,231 after falling nearly 15% during the first week of June. Market sentiment remained weak as investors reacted to AI-related profit booking, geopolitical uncertainty and 13 consecutive sessions of spot Bitcoin ETF outflows. Traders continued to monitor the key $62,000 support level amid heightened volatility.

Ethereum traded in the $1,730-$1,780 range after extending recent losses. Despite the sharp correction, Ethereum continued to hold a market capitalisation above $200 billion, while daily trading volumes remained elevated above $23 billion.

US Stock Futures
US stock futures weakened on Friday ahead of the closely watched May nonfarm payrolls report, while technology shares remained under pressure after Thursday’s global tech selloff spread into Asian and European markets. Futures linked to the S&P 500 fell 0.49%, while Nasdaq-100 futures dropped 1.02%. Futures tied to the Dow Jones Industrial Average edged marginally higher.

Investor sentiment remained cautious following weak reactions to recent technology earnings and concerns over stretched AI-related valuations, with the Nasdaq poised for a sharply weaker opening. Markets are now focused on the US jobs report for further clues on Federal Reserve interest rate expectations.

US Treasury Notes
US Treasury yields were largely steady in premarket trade on Friday as investors awaited the closely watched May nonfarm payrolls report for fresh signals on the Federal Reserve’s interest rate trajectory. The benchmark 10-year Treasury yield hovered near 4.473%, little changed after easing in the previous session, while the policy-sensitive 2-year yield traded around 4.045%.

Bond markets remained cautious as traders balanced resilient US economic data against slowing labour market expectations and persistent inflation risks linked to elevated Brent Crude prices. Geopolitical uncertainty surrounding US-Iran negotiations and broader West Asia tensions also continued to influence demand for safe-haven assets.

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