Indian equity markets experienced a sharp downturn, marking a five-session losing streak due to stalled US-Iran peace negotiations, record foreign investor outflows totaling over $26.4 billion in 2026, and elevated crude oil prices, which have pushed Brent crude around $94 per barrel, posing a significant concern for India as a major importer; the BSE Sensex and NSE Nifty both hit intraday lows, with broad-based selling affecting most sectoral indices, although IT stocks showed resilience; meanwhile, the rupee recovered slightly against the US dollar, and traders are closely monitoring the upcoming RBI monetary policy decision and India-US trade talks, alongside positive domestic economic data indicating industrial production expansion and a fiscal deficit matching budget targets.

Indian equity markets experienced a sharp downturn, marking a five-session losing streak due to stalled US-Iran peace negotiations, record foreign investor outflows totaling over $26.4 billion in 2026, and elevated crude oil prices, which have pushed Brent crude around $94 per barrel, posing a significant concern for India as a major importer; the BSE Sensex and NSE Nifty both hit intraday lows, with broad-based selling affecting most sectoral indices, although IT stocks showed resilience; meanwhile, the rupee recovered slightly against the US dollar, and traders are closely monitoring the upcoming RBI monetary policy decision and India-US trade talks, alongside positive domestic economic data indicating industrial production expansion and a fiscal deficit matching budget targets.

Indian equity markets experienced a sharp downturn, marking a five-session losing streak due to stalled US-Iran peace negotiations, record foreign investor outflows totaling over $26.4 billion in 2026, and elevated crude oil prices, which have pushed Brent crude around $94 per barrel, posing a significant concern for India as a major importer; the BSE Sensex and NSE Nifty both hit intraday lows, with broad-based selling affecting most sectoral indices, although IT stocks showed resilience; meanwhile, the rupee recovered slightly against the US dollar, and traders are closely monitoring the upcoming RBI monetary policy decision and India-US trade talks, alongside positive domestic economic data indicating industrial production expansion and a fiscal deficit matching budget targets.

Indian equity markets opened sharply lower on Tuesday, extending what has now become a five-session losing streak, as stalled US–Iran peace negotiations, record foreign investor outflows, and elevated crude oil prices continued to batter sentiment. The BSE Sensex dropped as much as 452 points to an intraday low of 73,815.12 while the NSE Nifty 50 touched an intraday low of 23,229.15 after shedding 153.45 points in morning trade.

The selling was broad with 14 of 16 major sectoral indices declining, while small-cap and mid-cap indices lost 0.3 per cent and 0.6 per cent, respectively. 

Bajaj Finance, Bajaj Finserv, Power Grid, Larsen & Toubro, and NTPC were among the biggest laggards on the Sensex, while IT stocks, such as Infosys, TCS, Tech Mahindra, and HCL Tech, provided a rare bright spot, with the sector's index gaining close to 3 per cent, taking its three-session rally close to 6 per cent.

Although Lebanon announced a partial ceasefire between Hezbollah and Israel, it was seen as a limited de-escalation. US–Iran negotiations continued to stutter, keeping Brent crude hovering around $94 per barrel. President Donald Trump disclosed on Monday that he had persuaded Israeli Prime Minister Benjamin Netanyahu to call off a planned strike on Beirut, a conversation described in reports as "heated." 

Iran had earlier threatened to end talks with the US over Israeli attacks on Lebanon. The prolonged conflict has pushed energy prices sharply higher, with Brent now trading about 27 per cent above pre-war levels, a direct concern for India, the world's third-largest crude importer.

Foreign portfolio investors offloaded equities worth ₹3,911.68 crore on a net basis on Monday alone, according to exchange data. Their cumulative outflows in 2026 have now surpassed $26.4 billion, exceeding 2025's full-year record. 

State-owned hydropower firm NHPC fell more than 4 per cent after the government announced an offer for sale of up to 6 per cent of its stake at an 8 per cent discount to the previous close.

The rupee, on the other hand, edged up 16 paise to 95.03 against the US dollar in early trade on Tuesday, after depreciating 34 paise on Monday to close at 95.19. 

The Indian currency opened at 95.16 at the interbank foreign exchange market before firming. The dollar index was trading marginally lower at 99.19, while Brent was at $94.42 in futures trade. 

Traders are closely watching two domestic developments: the RBI's monetary policy decision on June 5 and the start of India–US trade talks in New Delhi this week. The US delegation led by Assistant US Trade Representative Brendan Lynch was expected to hold discussions with Indian officials on the path towards a bilateral trade agreement. 

Additionally, the latest official data revealed that India's industrial production expanded 4.9 per cent in April, manufacturing output grew 6.2 per cent, and the government confirmed its fiscal deficit came in at exactly 4.4 per cent of GDP for FY26, matching its own budget target.

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