MARKET WRAP | WEDNESDAY, 3 JUNE 2026
NIFTY SLIDES BELOW 23,450 AS IT STOCKS CRASH, CRUDE SURGES PAST $98 AND IRAN PEACE TALKS UNRAVEL AGAIN; RBI MPC MEETING BEGINS
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Wednesday proved to be a punishing session for Indian equity markets. In a stunning reversal of Tuesday's hard-fought recovery, benchmark indices crumbled under a triple assault — a ferocious selloff in information technology stocks, a sharp resurgence in crude oil prices, and fresh military escalation between the United States and Iran that shattered any remaining hopes of a near-term ceasefire. The Reserve Bank of India's Monetary Policy Committee also convened its three-day meeting today, adding a layer of domestic anticipation to an already charged global backdrop.
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INDIAN MARKETS
The headline equity benchmarks ended sharply lower on Wednesday, weighed down by a surge in crude oil prices and escalating geopolitical tensions in the Middle East. The S&P BSE Sensex declined 303.67 points, or 0.41%, to settle at 74,346.17, while the Nifty 50 settled at 23,405.60 points declining by 0.33% mark at the close of trading. Among sectoral indices, IT, Realty, and FMCG stocks declined sharply, while banking and financial services shares bucked the trend and ended in positive territory.
The carnage in the IT sector was particularly severe. The Nifty IT index slumped 5.57% to 29,384.45, reversing the gains of the previous three sessions in a single day. Tata Consultancy Services tumbled 8.37%, Persistent Systems fell 7.09%, LTM declined 6.72%, Coforge slid 6.61%, Tech Mahindra dropped 6.32%, HCL Technologies lost 5.24%, Mphasis shed 4.23%, Infosys declined 3.79%, Oracle Financial Services Software was down 3.38%, and Wipro fell 2.78%.
The IT rout was triggered by a specific development in US markets that struck at the heart of the sector's near-term growth thesis. Foreign portfolio investors have so far sold ₹24,109 crore worth of assets across asset classes in the first two days of June 2026 alone, according to NSDL data. Crude oil prices trading at elevated levels above $96 per barrel further weighed on market sentiment amid these sustained foreign outflows.
The session's intraday arc was especially volatile. The Nifty 50 opened marginally higher at 23,415.95 but lost more than 200 points after the opening bell, with the index trading 0.89% lower at 23,273.50 and the Sensex down 1.07% at 73,843 points within the first hour of trade. The selling was broad-based, with TCS, Tech Mahindra, Infosys, HCL Tech, ITC, and Eternal among the top losers, while ONGC, Apollo Hospitals, Bajaj Auto, and Maruti Suzuki offered a partial cushion as gainers.
Technically, Wednesday's close keeps the Nifty under pressure. According to market analysts, the Nifty has immediate resistance at Tuesday's high of 23,556. A break above this level, if confirmed, could see price action rising to the next resistance band of 23,700–23,800, and a move beyond 23,800 could open the door to 24,100. However, if Nifty fails to sustain above Tuesday's high, the index may trade in the 23,200–23,550 range. Bank Nifty broke its four-session losing streak on Tuesday but the trend still appears to be within a wider consolidation band.
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THE RBI MPC MEETING: THE DOMESTIC WILDCARD
The Reserve Bank of India convened the first day of its second bi-monthly Monetary Policy Committee meeting for calendar year 2026 on Wednesday, with the policy decision expected on Friday, June 5. The meeting is the most consequential domestic macro event of the month, with rate-sensitive sectors — banking, real estate, and infrastructure — watching closely.
Markets are broadly pricing in a rate hold, with the RBI maintaining its balancing act between supporting growth and managing inflation that has been kept elevated by higher fuel costs, a weaker rupee, and residual food price pressures. However, if the central bank signals a dovish tilt or provides a clearer forward guidance in favour of an eventual cut, rate-sensitive sectors could find a meaningful catalyst in Friday's announcement. Any hawkish surprise, on the other hand, risks extending the current phase of market weakness.
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ASIAN MARKETS
Asian markets reflected the same geopolitical anxiety that gripped Dalal Street, though with slightly greater resilience.
Asia-Pacific markets opened broadly higher Wednesday, with Japan's Nikkei 225 hitting a record high, as investors appeared to initially look past uncertainty over US-Iran negotiations. Japan's Nikkei 225 extended early gains to rise 2.94%, while the Topix added 2.14%. Mainland China's CSI 300 was 1.52% higher, while Hong Kong's Hang Seng lost 1.73%. Australia's S&P/ASX 200 rose 0.82%. India's Nifty 50 fell 0.78% and the BSE Sensex slipped 0.85%.
The divergence in Asian markets was notable: Japan's record-high performance was propelled by a surge in technology and semiconductor-related shares, tracking Nvidia's AI-led momentum from US markets, while Hong Kong's decline reflected continued caution over the energy crisis and concerns about China-linked shipping disruptions around the Strait of Hormuz. Secretary of State Marco Rubio had told the Senate Foreign Relations Committee that Iran has mined "large segments" of the Strait of Hormuz and is "firing on commercial ships," with the White House confirming that the Pentagon has destroyed numerous mines and over 40 minelaying vessels.
Taiwan's TWSE held firm on the back of the global AI hardware upcycle. South Korea's Kospi, which had been a standout performer in recent weeks driven by Samsung Electronics and SK Hynix's HBM chip momentum, also traded cautiously as the region digested fresh military flashpoints.
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AMERICAN MARKETS
Wall Street continued its remarkable record-setting streak on Tuesday even as the Iran conflict created intermittent volatility, with artificial intelligence stocks again providing the primary engine of gains.
The S&P 500 rose 0.13% to 7,609.78, notching another record close and closing above 7,600 for the first time ever. The Nasdaq Composite inched up 0.03% to 27,093.90, and the Dow Jones Industrial Average gained 0.45% to 51,307.79 in an uneven session. Marvell Technology was among the day's top gainers, closing up 33% on comments from Nvidia CEO Jensen Huang who called it a potential trillion-dollar company. Hewlett Packard Enterprise soared 19% on strong earnings and raised full-year guidance. Alphabet slid almost 4% as investors weighed its plan to raise $80 billion through stock sales to fund artificial intelligence infrastructure, including a $10 billion investment from Berkshire Hathaway.
US stock futures were little changed Wednesday morning after all three major indexes closed at fresh records during the regular session. Futures for S&P 500 and Nasdaq 100 were down 0.1% and up 0.2% respectively, while futures tied to the Dow Jones Industrial Average lost 123 points, or 0.3%. Late Tuesday, Kuwait's army said it was intercepting hostile targets with its air defense systems — a flashpoint that rattled after-hours markets and contributed to the IT sector's severe markdown in India on Wednesday.
The Shiller P/E Ratio for the S&P 500 is now at elevated levels, prompting cautionary notes from JPMorgan CEO Jamie Dimon and other prominent investors. However, the relentless AI-driven earnings beat cycle and strong institutional buying on dips have consistently overwhelmed the bears. The US market's continued record highs stand in sharp contrast to India's persistent selling pressure, underscoring how differently the two economies are experiencing the Iran conflict's fallout.
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CRUDE OIL
Energy markets moved sharply higher on Wednesday as the diplomatic outlook darkened, erasing weeks of peace-deal optimism in a matter of hours.
Brent crude futures rose toward $98 per barrel on Wednesday, gaining for a third straight session as uncertainty surrounding US-Iran peace talks kept a geopolitical risk premium firmly embedded in oil markets. According to the US Central Command, Iran launched ballistic missiles toward neighboring countries, while US forces carried out strikes on Qeshm Island in retaliation for attempted attacks attributed to Tehran. Despite the escalation, President Trump insisted that negotiations with Iran remain active, pushing back against reports from Iranian state media claiming that talks with Washington had been suspended due to the fighting in Lebanon.
In the United States, industry data showed crude inventories declined by 6.8 million barrels last week. If confirmed by official government figures due Wednesday, it would mark the sixth consecutive weekly drawdown in US crude stockpiles — a supply signal that further supported prices on the upside.
WTI crude prices rose more than 1% on Tuesday to above $93 per barrel, with Iran reviewing a US proposal to end the war but having not been in contact with Washington for several days, despite President Trump's statement that negotiations remain underway.
The significance of rising crude for India cannot be overstated. Every $10 per barrel increase in oil prices widens India's annual import bill by approximately $12–15 billion, pressures the current account deficit, stokes retail inflation, and depreciates the rupee. At $98 Brent, India is operating in a zone that tests fiscal prudence, strains public sector oil marketing companies, and narrows the RBI's room to manoeuvre on monetary policy. Domestic petrol prices are currently at ₹111.21 per litre and diesel at ₹97.83 per litre in Mumbai — levels that directly feed into logistics and food inflation across the economy.
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GOLD AND SILVER IN INDIA
Precious metals came under pressure on Wednesday as a stronger US dollar and dimming safe-haven flows from partial diplomatic optimism weighed on bullion, even as fresh military escalation provided a floor.
Gold rates and silver rates in India tumbled on June 3, 2026, following the trend in the global market as US-Iran ceasefire agreement hopes dimmed on renewed tensions. MCX gold for August 2026 expiry dropped below ₹1,59,000 per 10 grams, while the bullion for the June 5 expiry plunged by 1% to struggle around ₹1,54,500 per 10 grams. MCX silver for June 2026 expiry slipped sharply by over ₹2,000 to below the ₹2.65 lakh mark. In the global market, spot gold erased the $4,500 per ounce mark and traded between $4,475–4,485. Spot silver traded below $75 per ounce.
Investors' sentiment soured on the likelihood of the US Federal Reserve keeping interest rates elevated for a longer period, after the latest US job openings data surged to nearly the highest level in two years in April 2026, while layoffs tumbled — signalling continued resilience in the US labour market and reducing the probability of near-term Fed rate cuts.
On the Multi Commodity Exchange, gold settled at ₹1,59,306 per 10 grams on Tuesday's close, while silver fell to ₹2,66,522 per kg. In the physical retail market, 24-carat gold is trading around ₹15,621 per gram across major Indian cities, while 22-carat gold is priced near ₹14,319 per gram. Silver prices in the domestic bullion market hover close to ₹2,79,900 per kilogram.
City-wise, Delhi and Noida retail 24K gold at ₹15,636 per gram, while Mumbai and Kolkata are at ₹15,621 per gram. Chennai, which trades at a premium due to higher local levies, shows 24K at ₹16,817 per gram. Silver sterling (925 purity) is quoted at approximately ₹2,74,000 per kilogram.
The medium-term case for gold remains intact. Any renewed military escalation — as seen today with Iran's missile launches and US strikes on Qeshm Island — tends to quickly reverse gold's soft patches. Analysts broadly expect spot gold to find demand support at the $4,450–4,475 range and to attempt fresh highs above $4,600 if the conflict intensifies further.
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CURRENCY MARKET — RUPEE AND KEY PAIRS
The Indian rupee remained under persistent pressure on Wednesday, caught between rising crude oil import demand, sustained FII outflows, and a resurgent US dollar on strong domestic economic data.
As of June 3, 2026, the USD/INR exchange rate stands at approximately ₹95.71, with 1 Indian Rupee equal to $0.01045. The Euro is trading at ₹110.99 per Euro as of June 3. The Japanese Yen is at ₹0.5987 per yen as of today, June 3. The British Pound is quoted at ₹128.54 against the rupee, with the day's range between ₹127.76 and ₹128.31.
The rupee's year-on-year depreciation of nearly 12% against the dollar reflects the cumulative toll of the Iran conflict on India's macroeconomic fundamentals. With crude prices now back near $98 and the RBI MPC meeting in progress, the currency faces a binary near-term path: a dovish policy signal with a peace breakthrough in the Gulf could catalyse a sharp rupee recovery toward ₹93–94 per dollar, while continued escalation and a hold-with-hawkish-bias from the RBI could see the rupee test new lows toward ₹97.
The AED (UAE Dirham) is currently implied at approximately ₹26.08 per dirham, and the Singapore Dollar trades around ₹74.50, both relevant to the large Indian diaspora remittance corridors.
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INDIA-US TRADE TALKS: SECOND DAY OF NEGOTIATIONS
Today marks the second of three scheduled days of India-US bilateral trade negotiation meetings. Markets remain hopeful of a positive outcome from these talks, with negotiation meetings running through June 4. Analysts have flagged that a favourable trade framework could meaningfully boost India's merchandise export prospects and provide a structural tailwind to the rupee. However, with geopolitical and crude-driven selling dominating the day's agenda, the trade talk optimism remained very much in the background.
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OUTLOOK — RBI FRIDAY, IRAN EVERY DAY
Thursday sets up as a crucial juncture. The RBI MPC's second day of deliberations will unfold against a backdrop of crude oil near $98, a stressed rupee, and continued FII selling — conditions that present the central bank with a genuinely difficult policy calibration challenge. The policy announcement on Friday, June 5, will be the single most important domestic event of the week.
On the global front, Trump is seeking written commitments from Iran on specific nuclear-related concessions as part of a preliminary framework, after Tehran had previously provided only verbal assurances. The lack of a written breakthrough has heightened concerns that global crude inventories may need to be drawn down further, keeping energy prices elevated in the near term.
For Nifty to sustain any meaningful recovery, two conditions must align: the RBI must deliver either a cut or a clearly dovish hold on Friday, and crude oil must retreat back below $92–93 per barrel — ideally driven by a credible written framework from the Iran negotiations. In the absence of both, the path of least resistance for Indian equities points toward a retest of the 23,000–23,200 support zone. Investors are advised to approach the remaining sessions of the week with heightened caution, keeping position sizes in check ahead of Friday's potentially market-moving RBI policy decision.
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*All data as of market close and intraday updates on Wednesday, 3 June 2026. American markets data refers to Tuesday, 2 June 2026 close and Wednesday pre-market activity. Commodity and currency prices are indicative and sourced from published market data platforms. This article is for informational purposes only and does not constitute investment advice.*