Indian Markets End in Red for Third Consecutive Day

Mumbai, June 3, 2025 — Indian equity benchmarks extended their losing streak into the third consecutive session on Tuesday, with both the Sensex and Nifty closing in the red amid persistent selling pressure in IT, FMCG, and financial stocks. The S&P BSE Sensex fell by 220 points to close at 74,010, while the NSE Nifty 50 shed 60 points to end at 22,460.

While the broader market sentiment remained weak, the realty sector stood out as a lone bright spot, gaining 1% on renewed optimism in urban residential and commercial demand.

Sectoral Performance: Realty Shines Amid Broad Weakness

Among the sectoral indices, Nifty Realty was the only major gainer, up nearly 1%, supported by stocks like DLF, Godrej Properties, and Prestige Estates. In contrast, heavyweights such as HDFC Bank, Infosys, and ITC dragged the benchmark indices lower.

• Nifty IT was down by 1.4%, with persistent selling amid global tech sector underperformance.

• Nifty FMCG dipped 0.8% as consumer sentiment remains cautious due to inflationary pressures.

• Nifty Financial Services lost 0.9%, weighed down by profit-booking in private banks and NBFCs.

Market Sentiment and Analyst Insights

Investors remain jittery ahead of key global events and domestic triggers. The outcome of the Reserve Bank of India’s (RBI) upcoming monetary policy meeting, scheduled later this week, remains in sharp focus.

“The markets are consolidating after a sharp rally in May. Profit-booking ahead of the RBI policy announcement is natural, especially with concerns about inflation creeping back,” said Deepak Jasani, Head of Retail Research at HDFC Securities.

“We’re also seeing global cues turning slightly risk-off, particularly with rising U.S. bond yields and mixed macroeconomic data from China and Europe,” added Amit Gupta, Fund Manager at ICICI Prudential AMC.

Global Cues and Macroeconomic Context

Globally, markets were subdued as investors digested a mix of data on manufacturing activity and awaited key interest rate decisions. Wall Street closed mostly flat on Monday, while Asian peers showed mixed trends on Tuesday.

Rising U.S. Treasury yields and the strengthening of the dollar have also pressured foreign institutional investment (FII) inflows into emerging markets, including India. On Monday, FIIs were net sellers worth ₹1,280 crore, while domestic institutional investors (DIIs) bought equities worth ₹950 crore.

On the macro front, crude oil prices held steady around $78 per barrel, but domestic fuel prices remained unchanged. Retail inflation in India remains a concern, especially in food prices, which could influence the RBI’s rate stance.

Technical View and Key Levels

From a technical standpoint, analysts suggest that Nifty might continue to remain range-bound in the short term unless there is a significant macro or policy trigger.

“The Nifty is facing resistance around 22,650 and has immediate support near 22,300. A break below that could lead to a further slide toward 22,100,” said Rupak De, Senior Technical Analyst at LKP Securities.

The broader market, however, saw slightly better traction compared to the large-caps, with Nifty Midcap 100 and Smallcap 100 ending marginally in the green.

Investor Outlook: Focus on RBI Policy and Global Data

Investors are advised to remain cautious with a focus on risk management and selective stock picking. Realty stocks could continue to outperform in the near term given strong pre-sales data and improving urban infrastructure.

The upcoming RBI policy decision on June 6 is expected to keep the repo rate unchanged, but commentary on inflation and growth outlook will be closely scrutinized. Market participants also await U.S. non-farm payrolls data later this week, which could provide clues on the Federal Reserve’s rate path.

“This phase should be seen more as consolidation rather than a correction. Long-term investors can use the dips to accumulate quality stocks in banking, infrastructure, and consumer discretionary segments,” advised Mehul Shah, Director at Axis Securities.

Conclusion

Despite the third day of losses for Indian equity markets, the underlying fundamentals remain intact. Realty stocks provided a silver lining, while broader investor sentiment hinges on policy clarity from the RBI and stability in global cues. Until then, markets may continue to witness short-term volatility.