Sensex Falls 0.97%, Nifty Down 1.04% as Realty Index Drops 2.56%

Indian equity markets ended the week on a weaker note, with Sensex closing at 74,243.34 and Nifty at 23,366.70, both declining over 0.7% for the week. According to latest reports, Gift Nifty was trading near 23,531, around 7 points below the previous close of Nifty futures, indicating a muted start for domestic equities. The Reserve Bank of India kept the repo rate unchanged at 5.25% as widely expected, but the policy decision failed to provide significant market relief. The central bank raised its inflation forecast to 5.1% from 4.6% and lowered its growth estimate, signalling that risks are rising and the easing cycle is likely over for now. For the week ended June 5, the NIFTY50 declined 181.05 points, or 0.8%, while the BSE SENSEX fell 532.4 points, also down 0.7%. Indian equities declined 0.2% on Friday, erasing intraday gains of nearly half a percent, marking the second consecutive weekly loss as investor sentiment turned tepid due to a lack of triggers after the RBI Monetary Policy.

Among sectors, the Nifty Realty index was the biggest loser, sliding 2.56%, followed by Nifty Metal which declined 2.33% and Nifty Auto which fell 1.85%. The Nifty FMCG index was the biggest loser, sliding 2.2%, followed by Nifty Realty, which fell 1.7%. The Nifty Metal and Oil & Gas declined 1.6% and 0.8% respectively, while the Nifty Auto index ended the week 0.7% lower. However, the Nifty Media (6.7%), Nifty Consumer Durables (1.5%), Nifty PSU Bank (1.3%), and Nifty Bank (0.5%) were the only gainers by the end of the week. Weekly top gainers included Titan Company (4.5%), Adani Enterprises (3.8%), Infosys (3.2%), Coal India (3.1%), and Eternal (2.4%). Weekly losers were led by NTPC (-6.5%), UltraTech Cement (-5%), Bajaj Finserv (-4.5%), Tata Consumer Products (-4%), and HDFC Life Insurance Company (-3.3%). The Nifty Midcap 100 fell 1.6%, underperforming the main equity indices, while the Nifty Smallcap 100 dipped 0.2%. According to The Economic Times, market breadth remained weak, with 3,117 stocks declining against 1,249 advances on the BSE, while the BSE MidCap and SmallCap indices fell 1.72% and 1.82% respectively. Among Sensex constituents, InterGlobe Aviation (IndiGo), Eternal, Mahindra & Mahindra, Reliance Industries and TCS were the top losers, while BEL, Power Grid, Tech Mahindra, Bharti Airtel and SBI were among the gainers.

Despite the weekly decline, big market voices from major financial institutions continue to express optimism about India's long-term prospects. Jane Fraser, Chair & CEO of Citi, emphasized that investors should not lose sight of India's long-term story amidst short-term market fluctuations, acknowledging that India's higher valuations compared to other markets and relatively lower private capex contributed to current investor caution. Arbind Maheshwari, Head of India equities at Bank of America Securities, believes investors should not be pessimistic about FII outflows, highlighting market resilience with GST collections at their peak and potential pick-up in earnings. Ridham Desai of Morgan Stanley highlighted how corporate equity issuances can bring foreign investors back into Indian markets, while David Hauner of Bank of America Securities warned that the currency could weaken against the US Dollar as rising US yields continue to pressure Emerging Markets. Citi's South Asia CEO Amol Gupte noted that investors are still backing strong Indian businesses despite global uncertainties through quality IPOs, with the Q4 and FY26 GDP numbers reported on Friday evening breezing past estimates. Technical analysts suggest that a move above and sustained trading beyond 23,125 could trigger a meaningful recovery towards the 23,250–23,300 zone, while a breach below 23,070 may invalidate the pattern and drag Nifty below the 23,000 mark. Foreign portfolio investors sold shares worth ₹5,555.67 crore, while domestic institutional investors bought shares worth ₹5,165.24 crore, according to provisional BSE data, as reported by The Financial Express.

The market decline comes against the backdrop of escalating US-Iran tensions and the Hormuz Strait crisis, which have created significant concerns for global oil markets. As reported by Goodreturns, these geopolitical developments are contributing to increased volatility in commodity markets and affecting investor sentiment across global markets. The US military said it struck Iranian coastal radar and surveillance sites after intercepting drones launched by Iran toward the strategically important Strait of Hormuz, with US officials believing the drones were targeting maritime traffic in the region. The subsequent strikes on surveillance facilities in Goruk and Qeshm Island have heightened concerns over potential disruptions to global energy supplies and shipping routes, factors that could influence crude oil prices and investor sentiment worldwide. Brent crude witnessed sharp volatility during the week before settling about 2.16% higher at around $93 per barrel, with Iran's missile strikes on Israel in retaliation for Israel's actions in Lebanon pushing Brent crude prices higher to almost $98 per barrel. The US stock market had its worst day since October on Friday as a sell-off in big technology companies weighed on the broader market and a strong jobs report boosted expectations that the Federal Reserve may be forced to hike interest rates at some point this year. The S&P 500 sank 2.6%, its biggest one-day drop since October 10, when the Trump administration threatened to impose a 100% tariff on imported goods from China, with the Nasdaq Composite slumping 4.2%. Despite the decline, Indian markets outperformed several regional peers, with South Korea's benchmark index plunging 8.3%, while Japan and Taiwan fell 3.85% and 3.48% respectively.

Crude oil prices remained largely stable after sharp losses in the previous session, with Brent crude trading at $95.24 per barrel, down 0.22%, and US West Texas Intermediate (WTI) crude easing 0.11% to $92.94 per barrel. According to Goodreturns, the rising crude oil prices are contributing to inflationary pressures and affecting various sectors of the Indian economy. Gold prices edged lower and were on track for a weekly decline, with spot gold falling 0.3% to $4,462.22 per ounce and down around 1.6% this week. Spot silver declined 0.6% to $73.45 per ounce, while the US dollar remained firm at 99.434 on the dollar index, headed for a weekly gain of about 0.5% amid safe-haven demand. Adding to investor concerns, the India Meteorological Department projected rainfall during the June–September season at 90% of the long-period average (LPA), lower than its earlier forecast of 92%, with an 84% probability of below-normal rainfall. Among the stocks that hit their 52-week highs included CCL Products, Inox India, Aster DM Health, KIMS, Sai Life Sciences and Apollo Hospital, while stocks witnessing significant selling pressure were Wipro, Swiggy, JK Cement, RVNL, SBI Card, Coromandel and TCS.

India's economy expanded 7.7% in FY26, up from 7.1% in the previous year, according to provisional estimates released by the statistics ministry. However, the GDP growth forecast for FY27 has been cut to 6.6% from 6.9%, reflecting concerns over crude oil prices, global uncertainty, and weather risks. The RBI, in its June 2026 monetary policy, forecasted that real GDP growth for the financial year ending 2026–27 is estimated to grow at a rate of 6.6% due to the rise in energy prices and other input costs, combined with supply chain disruptions. Despite the RBI's decision to keep rates unchanged, the central bank expects the retail inflation rate to rise to the upper tolerance band in the third quarter of the fiscal year ending 2026-27. Derivatives positioning suggests a range-bound market with the Put-Call Ratio at 0.95, while Nifty 50 continues to trade within a crucial consolidation range with immediate support between 23,150-23,250 and resistance in the 23,547-23,556 zone. Petrol prices stand at ₹111.21 per litre and diesel at ₹97.83 per litre, reflecting the impact of global oil price movements on domestic fuel costs. Investors suffered a notional loss of ₹6.31 lakh crore as the total market capitalisation of BSE-listed companies declined to ₹455.3 lakh crore, as reported by The Financial Express.

Foreign portfolio investors sold shares worth a net ₹31,114 crore during the week, while domestic institutional investors provided strong support by purchasing shares worth ₹33,933 crore, according to The Economic Times. So far in June, foreign investors have sold shares worth ₹25,831.5 crore, highlighting continued foreign selling pressure. The India VIX volatility index declined 2.46% for the third straight week, indicating that despite the market weakness, investors are not yet pricing in panic conditions. Of 4,399 shares, 1,993 advanced, and 2,212 declined, with the Nifty Midcap 100 index declining 0.3% while the Nifty Smallcap 250 ended marginally higher. Nifty could trade in a range between 23,150 and 23,700 in the near term, facing hurdles at the higher level of the band, as analysts suggest the absence of triggers after earnings season and policy announcements led to choppy trading sessions. Ajit Mishra of Religare Broking noted that while the broader index trend remains weak, mixed performance among heavyweight stocks is limiting the pace of decline, maintaining a cautious stance and preferring a sell-on-rise approach until the Nifty decisively reclaims the 23,700 level.