Today, the Nifty IT index emerged as the standout performer, surging 4.3 percent with significant gains from Infosys and TCS, both rising by up to 6 percent. “The rebound was primarily driven by buying in heavyweight stocks across sectors despite persistent geopolitical uncertainty in West Asia and ongoing foreign institutional selling,” stated Ajit Mishra, Senior Vice President of Research at Religare Broking.
The BSE Sensex recorded a close at 74,649.84, up 382.50 points or 0.52 percent, while the Nifty 50 settled at 23,483.55, gaining 100.95 points or 0.43 percent. Additionally, the Nifty Midcap 100 saw an increase of 0.19 percent, and the Smallcap 100 rose by 0.40 percent. However, despite today’s gains, South Korea has overtaken India in market capitalization, pushing India to seventh place. Within a short span, semiconductor-heavy Taiwan ($5.15 trillion) and South Korea ($5 trillion) surpassed India’s market cap of $4.85 trillion, as foreign portfolio investors (FPIs) continued to sell domestic stocks. On Tuesday alone, FPIs sold shares worth ₹8,363 crore, accumulating nearly ₹2.5 lakh crore in sales for the current calendar year.
Today’s performance of the Nifty IT index was significantly influenced by encouraging commentary from global technology firms regarding AI-driven demand and improving revenue visibility for Indian IT exporters. A weakening rupee, which benefits dollar-earning companies, further fueled this rally, with IT stocks rising over 7 percent in the last three sessions. Markets initially opened with a gap down, hitting an intraday low near 23,229, but managed to recover by over 300 points in the afternoon. Short covering ahead of the weekly Nifty expiry contributed to this bounce, as the India VIX fell approximately 7 percent to 16.03, reflecting improved near-term risk sentiment.
On the sectoral front, Consumer Durables, FMCG, Auto, PSU Banks, Metals, and Realty sectors ended in the positive zone. In contrast, Healthcare, Pharma, and Oil & Gas sectors lagged, with the Pharma index dropping nearly 1 percent due to profit-booking activities.
From a macroeconomic perspective, India’s industrial production increased by 4.9 percent year-on-year in April 2026, according to the revised Index of Industrial Production (IIP) base year, with robust capital goods growth suggesting a healthy domestic capital expenditure cycle. Additionally, negotiations for a bilateral trade agreement between India and the U.S. are taking place in New Delhi from June 2-4, with reports indicating that most key elements have been finalized.
Rahul Singh, Chief Investment Officer for Equities at Tata Asset Management, remarked that ongoing geopolitical tensions are keeping crude oil prices elevated. The mixed global signals have led to persistently high bond yields and pressure on the rupee, raising the risk premium on Indian equities and affecting market valuations. “Despite these challenges, the impact on corporate earnings has been manageable thus far, and management commentary during the fourth-quarter earnings has remained encouraging,” he noted.
The rupee weakened to approximately 95.26 against the dollar, down around 0.35 percent amid rising crude oil prices, which have fueled concerns about India’s import bill. International crude oil prices decreased by over 2 percent to around $90 per barrel as investors reassessed the risks of an immediate conflict escalation in the Middle East. Meanwhile, gold prices increased by about 2 percent, and silver advanced over 1 percent as investors remained cautious ahead of upcoming U.S. nonfarm payroll data.
Looking forward, investor focus will shift to the Reserve Bank of India’s monetary policy outcomes, with rate-sensitive sectors expected to remain active. Key U.S. data releases, including nonfarm payrolls, S&P PMI figures, and EU CPI statistics, will also be closely monitored. Analysts suggest that a sustained movement above 23,650 on the Nifty is necessary for extending the recovery, while maintaining a critical support zone between 23,200 and 23,300 remains essential.
Published on June 2, 2026
