Indian equity markets extended their decline with the S&P BSE Sensex ending at 76,200.68, down 893.39 points or 1.16% and the Nifty 50 closing at 23,824.10, declining 278.80 points or 1.16% as of Tuesday's session. According to The Financial Express, both indices posted their worst single-day performance of the month, with the India VIX surging 8.56% to 13.40, signalling heightened market volatility. Market breadth remained weak with 2,790 stocks declining against 1,500 advancing on the BSE, indicating broad-based selling pressure across different market segments. As per The Financial Express, investors' wealth eroded by ₹5.50 lakh crore as the total market capitalisation of BSE-listed companies fell to ₹475.09 lakh crore. The BSE MidCap and SmallCap indices fell 0.89% and 0.73% respectively, with metals, IT, PSU banks, consumer durables and realty stocks among the worst performers, declining up to 3.22%. However, pharma and healthcare were the only sectors to end in positive territory, gaining up to 0.92%.
The Nifty IT index declined after brokerages including Jefferies and Morgan Stanley flagged softer demand trends following a weaker-than-expected outlook from Accenture, as reported by The Financial Express. Major IT stocks witnessed substantial selling pressure with Tata Consultancy Services down 2.97%, Infosys declining 2.95%, Wipro falling 2.91%, Mphasis dropping 2.17%, and L&T down 1.87%. Other IT stocks also faced selling pressure, including Tech Mahindra down 1.7%, HCL Technologies declining 1.46%, Coforge falling 0.63%, and Persistent Systems dropping 0.38%. The sectoral decline was attributed to Jefferies and Morgan Stanley flagging soft demand signals for the sector following Accenture's weak outlook, as reported by Business Standard. A potential US Federal Reserve rate hike, which could affect client spending in the US, is also weighing on IT stocks. Among Nifty constituents, Infosys and Wipro emerged as the biggest laggards, while Cipla and Power Grid were the top gainers.
India's industrial activity showed significant weakness with growth in eight core industrial sectors slowing to 0.5% in May 2026, marking the second-lowest level in 21 months, according to official data released by the Ministry of Commerce and Industry on June 22, 2026. As reported by Business Standard, five of the eight sectors recorded contractions during the month, with the crude oil sector contracting by 4.6%, worsening from a 3.9% decline in April and a 1.8% decline in May 2025. The natural gas sector also remained under pressure, shrinking by 4.9%, its weakest performance in the last three months. Only steel, cement and electricity registered growth, with the electricity sector recording the strongest growth at 8.7% and the steel sector growing at 5%, the lowest level in 13 months. The HSBC India Manufacturing PMI eased to 54.5 in June from 55.0 in May, while the Services PMI fell to 57.3 from 59.8, indicating a broad-based slowdown in economic activity. According to The Financial Express, the HSBC Flash India Composite PMI Output Index fell to 57.4 in June from 59.3 in May, indicating the slowest pace of expansion since March, as demand for goods and services softened and job additions moderated.
The Nifty Metal index declined nearly 3% as global metal prices retreated after the previous session's gains, as reported by The Financial Express. Metal stocks faced significant selling pressure amid broader market weakness and concerns about industrial demand. This sectoral decline reflects concerns about industrial demand and commodity price movements that impact metal-related companies. The Nifty Metal, IT and PSU Bank were among the worst performers, with most sectoral indices ending in negative territory. However, Nifty Pharma and Healthcare were the only sectors to close in the green, providing some relief to the overall market decline.
Asian markets witnessed broad-based declines, with South Korea's Kospi emerging as the worst performer, plunging 10%, while Japan's Nikkei fell 3.55%, Thailand down 2.11%, Hong Kong down 1.82% and China down 1.37%, according to The Financial Express. The decline was largely influenced by weakness across Asian markets, which also weighed on US futures amid concerns over the sustainability of the AI-driven rally, dampening overall market sentiment, said Ajit Mishra, SVP–Research, Religare Broking. Market sentiment weakened as early gains proved unsustainable amid negative global cues and prevailing caution, with profit booking after the recent rally further intensifying downside pressure, said Vinod Nair, Head of Research, Geojit Investments. Foreign portfolio investors (FPIs) bought shares worth ₹17.86 crore, while domestic institutional investors (DIIs) purchased shares worth ₹680.21 crore, according to provisional BSE data. Looking ahead, Indian equities are likely to remain range-bound with a slight negative bias amid weak global cues, continued foreign institutional investor outflows and lingering uncertainty over the proposed US-Iran ceasefire.
India's economic growth slowed in June as weaker demand was reflected in factory and services activity. As reported by The Financial Express, the HSBC Flash India Composite PMI Output Index fell to 57.4 in June from 59.3 in May, with the Services PMI falling to a 17-month low of 57.3 from 59.8, while the manufacturing PMI slipped to 54.5 in June from 55 in the previous month. According to The Financial Express, Pranjul Bhandari, chief India economist at HSBC, noted that "Private sector activity eased a bit in June. Growth of manufacturing output softened a tad as inventory-building lost steam after a few hectic months". Stable crude oil prices and easing geopolitical tensions offered some support, but investors remained cautious on monsoon progress and ongoing US-India trade negotiations, Nair added. According to Business Standard, a weak monsoon also weighed on investor sentiment, contributing to the overall market decline.
