Sensex and Nifty fell for a second session as IT stocks hit 52-week lows.
Smallcap and midcap indices outperformed, despite weakness in benchmark indices.
Fed outlook, monsoon progress and US jobs data remain key market triggers.
The Indian equity market extended its decline for a second straight session on Tuesday, with the benchmark indices ending around 0.33% lower as weakness in information technology stocks overshadowed gains in broader markets on the NSE's monthly F&O expiry day.
The BSE Sensex fell 249.70 points to close at 76,478.67, while the NSE Nifty 50 declined 80.50 points to settle at 23,865.75. India VIX, the volatility gauge, eased marginally to 13.48, indicating subdued market volatility despite the decline.
1 June 2026
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Market breadth remained positive, with 1,919 stocks advancing on the NSE against 1,383 declines, while 109 shares remained unchanged.
IT Stocks Weigh On Benchmarks
Technology stocks emerged as the biggest drag after concerns over persistent US inflation strengthened expectations that the US Federal Reserve could deliver multiple rate hikes this year.
Infosys, Tata Consultancy Services, HCL Technologies and Tech Mahindra declined up to 3%, dragging the Nifty IT index.
In contrast, Maruti Suzuki surged more than 5% after an international brokerage upgraded the stock to "Buy" and raised its target price to ₹16,500 from ₹13,800, citing multiple growth drivers. Titan, Bajaj Finance and Eternal also gained 2-3%.
Sectorally, the Nifty IT index declined nearly 3%, making it the worst-performing sector, while Nifty Realty and Nifty Consumer Durables gained more than 1% each.
Despite weakness in frontline indices, broader markets remained resilient.
The Nifty Smallcap 100 index advanced more than 1%, while the Nifty Midcap 100 gained around 0.4%, indicating continued investor interest in broader market stocks.
Market Awaiting Global Triggers
Vinod Nair, Head of Research at Geojit Investments, said the domestic market continued to remain in a consolidation phase as investors balanced easing geopolitical tensions against uncertainty surrounding the US-Iran peace process.
He said IT remained the key drag as investors awaited US employment data and further commentary from the new Federal Reserve Chair for clarity on the future interest-rate path.
Nair also noted that the weak monsoon, currently pointing to the largest rainfall deficit in a decade, has emerged as a domestic concern due to its potential impact on agricultural output and Q1 FY27 earnings. However, he added that stable crude oil prices, a resilient rupee and moderating FII outflows should provide near-term support, with large-cap stocks likely to outperform.
Technical Outlook
Rupak De, Senior Technical Analyst at LKP Securities, said the Nifty traded in a narrow 23,850-24,050 range during the monthly derivatives expiry, reflecting a lack of directional conviction.
According to him, the index continues to find support around its 50-day exponential moving average, although the daily RSI has entered a bearish crossover, signalling weakening momentum.
He said the 24,000 level has emerged as a crucial pivot because of significant call and put writing. A decisive break below 23,800 could trigger a meaningful correction, while holding above that level may pave the way for a recovery in the new derivatives series.
Gold, Rupee In Focus
Jateen Trivedi, VP Research Analyst at LKP Securities, said gold prices rebounded after recent sharp declines as short covering emerged near the $4,000-an-ounce level. COMEX Gold has corrected nearly 12% during June following the Federal Reserve's hawkish stance, while MCX Gold recovered more than ₹2,300 from recent lows.
He added that investors are now awaiting key US labour market data, including the ADP Employment Change, Non-Farm Payrolls and unemployment figures, which are expected to determine the next move in bullion prices.
On the currency front, Trivedi said the rupee weakened slightly to around 94.65 against the US dollar as the Dollar Index rebounded above 101. Despite stable crude oil prices, a stronger dollar kept pressure on emerging-market currencies. He expects the rupee to trade in the 94.35-94.90 range in the near term, with global developments continuing to drive sentiment.
