Indian equity markets opened in the red on Monday, June 2, 2026, weighed down by sustained foreign portfolio investor (FPI) selling and ongoing geopolitical tensions in West Asia. The BSE Sensex declined by 322.14 points, or 0.43 percent, to settle at 73,945.20, while the NSE Nifty 50 dropped 153.45 points, or 0.66 percent, to close at 23,229.15.
Market Experts Weigh In
Market experts indicated that domestic indices remain under pressure in the near term, although oversold conditions could pave the way for a technical recovery. Shrikant Chouhan, Head of Equity Research at Kotak Securities, stated, "We believe the market's short-term structure is weak, but due to temporary oversold conditions, we expect a technical bounce back from current levels." He added that for day traders, the 23,500/74,500 level will serve as a trend-setting threshold. Below this, the correction wave is likely to persist, potentially pushing the market toward 23,250–23,200/74,000–73,700. A close below the 23,200 level could trigger a swift retracement toward 22,800.
Global Sentiment and Geopolitical Factors
Analysts noted that global market sentiment continues to be influenced by developments surrounding the Iran conflict and peace negotiations in West Asia. Ajay Bagga, a Banking and Market Expert, commented, "The Iran peace deal remains the biggest catalyst for the markets. Trump's posts that talks were progressing and a deal was imminent in the next week saw a market reversal last evening in the US, with US stocks ending at record high levels." Dow Jones Futures were down 210.84 points, or 0.41 percent, at 50,868.04. The S&P 500 gained 19.90 points, or 0.26 percent, to 7,599.96, while the Nasdaq rose 114.19 points, or 0.42 percent, to 27,086.81.
Bagga added, "This morning in Asia, we are seeing a small cut in Asian markets on the Iran uncertainty as Israel continues its military action in Lebanon contrary to Trump's claims of having prevailed on both Israel and Hezbollah to tone down attacks on each other. Oil is down slightly, so markets are counting on Trump to deliver an exit from the Iran conflict." Most Asian markets traded lower, with GIFT NIFTY down 178.50 points, or 0.77 percent, at 23,263. Japan's Nikkei 225 declined 1.61 percent, and South Korea's KOSPI fell 2.57 percent. The Taiwan Weighted Index also traded lower. However, Hong Kong's Hang Seng rose 0.93 percent, while Singapore's Straits Times, Thailand's SET Composite, and Indonesia's Jakarta Composite posted modest gains. China's Shanghai Composite remained largely flat.
Volatility and Commodity Impact
Bagga highlighted that geopolitical risks continue to keep markets volatile. "The situation remains extremely volatile and the main reason global markets are at record levels despite this extreme geopolitical risk is the AI momentum play, with the huge USD 800 billion AI infrastructure spends holding up the economic momentum," he said. For India, there is some hope regarding the US-India trade deal, but continued FPI selling remains a strong overhang for the Indian markets.
In the commodities segment, gold prices remained under pressure amid a stronger US dollar and geopolitical developments. Manav Modi, Commodities Analyst at Motilal Oswal Financial Services Ltd, stated, "Gold prices started the week on a weaker note, pressured by a stronger U.S. dollar and renewed geopolitical uncertainty after Iran announced suspension of negotiations with US following fresh military strikes and Israel's expanded operations in Lebanon." Brent crude slipped USD 0.63, or 0.66 percent, to USD 94.35 per barrel, while WTI crude declined USD 0.71, or 0.77 percent, to USD 91.45 per barrel. Gold gained USD 11.82, or 0.26 percent, to USD 4,496.92.
Modi added that investors would closely track central bank decisions and key economic data during the week. "President Trump dismissed reports of a breakdown in talks, stating that discussions with Iran were continuing rapidly and that an Israeli strike on Beirut had been called off following his intervention. Gold struggled to attract strong safe-haven demand as investors continued to favor the U.S. dollar and risk assets amid expectations of higher inflation leading to higher for longer rates," he said. He further noted that US Manufacturing PMI data came broadly in line with expectations, while market focus this week will remain on the RBI policy meeting and key US labor market data.
