Sensex, Nifty end lower after choppy session, but policy relief and tax sops cushion fall
Nifty Slips 0.21%, Sensex Down 0.10% as Profit-Booking Hits Late Trade
Indian benchmarks closed in the red on 5 June 2026, snapping a two-day relief rally as investors booked profits ahead of the weekend. The Nifty 50 ended at 23,366.70, down 49.85 points or 0.21%, while the Sensex slipped 74.41 points to 74,285.60.
The day started on a positive note after the RBI kept the repo rate unchanged at 5.25%, but momentum faded as geopolitical jitters and elevated crude prices weighed on sentiment. Nifty hit an intraday high of 23,516.35 and low of 23,282.65, while Sensex oscillated between 74,717.57 and 73,988.75.
RBI Stands Pat, Cuts Growth Forecast as West Asia War Clouds Outlook
The RBI’s Monetary Policy Committee voted unanimously to hold rates steady, citing “difficult trade-offs” amid the escalating US-Iran conflict. Governor Sanjay Malhotra flagged sharply higher energy prices and supply chain disruptions as key risks.
The central bank trimmed FY27 GDP growth forecast to 6.6% from 6.9% and raised CPI inflation projection to 5.1%, warning of upside risks from the West Asia war. The rupee gained 43 paise to 95.36/$ post-policy, helped by RBI’s measures to ease foreign capital inflows.
To attract overseas money, RBI opened all new 15-, 30- and 40-year G-Secs to foreign investors under the Fully Accessible Route and scrapped capital gains tax for FPIs in G-Secs.
Sector Watch: IT Drags, Financials, Realty Hold Fort
Infosys led gainers with a 1.56% jump to ₹1,220, followed by Tech Mahindra and TCS. But Wipro crashed 6.26% to ₹191.52, the top Nifty loser.
Barring Nifty Metal, all sectoral indices traded positive in early trade. Nifty Media rallied 2.9%, while Nifty Financial Services Ex-Bank gained 1.7%. Banking stocks stayed supported after RBI retained its neutral stance, with Nifty Bank rising over 250 points intraday.
Geopolitics: Oil Shock, Venezuela Outreach Dominate Headlines
The US-Iran war continues to roil markets. Brent crude topped $95/barrel as Hezbollah rejected a Lebanon-Israel ceasefire. The conflict has disrupted 40% of India’s crude imports through the Strait of Hormuz.
In response, India is deepening energy ties with Venezuela. New Delhi called Caracas a “preferred partner” as Venezuela’s interim President Delcy Rodriguez visited India to discuss upstream and downstream projects. Venezuela supplied 427,000 bpd to India in May, making it India’s 4th-largest oil supplier.
On the trade front, Britain said the India-UK FTA implementation may be delayed due to a steel dispute, though talks are progressing “at breakneck speed”. Domestically, the US proposed 12.5% tariffs on India under Section 301 over forced labour concerns, adding to trade uncertainty.
What’s Next for Markets?
Analysts expect range-bound trade next week. “Immediate support is at 23,300-23,350, resistance at 23,700-23,750 for Nifty,” said HDFC Securities’ Nagaraj Shetti. The ability of Nifty to hold above 23,500 will be key for a move towards 23,640.
Foreign investors are rotating into short-term India bonds, expecting a policy turn as inflation risks rise. With the Iran war keeping crude volatile and monsoon risks looming, RBI’s data-dependent stance will likely keep volatility high.
Quick Takeaways:
1. RBI Pause: Repo rate held at 5.25%, but growth cut and inflation hawkishness cap upside.
2. Oil Risk: Brent above $95 keeps inflation and rupee under pressure.
3. Policy Sweeteners: Tax-free G-Secs, FPI sops aim to stabilize flows.
4. Geopolitics: India-Venezuela energy push; India-UK FTA delayed.
