Stock Market Today: Sensex drops nearly 600 points; Nifty holds near 23,400; Nifty IT falls over 2%

Indian benchmark indices opened lower on Wednesday, June 3, tracking weak global cues and continued investor caution over uncertainty surrounding peace talks between the United States and Iran.

The BSE Sensex opened at 74,507.73 against its previous close of 74,649.84. At around 9:16 AM, the index was trading at 74,064.46, down 585.38 points, or 0.78 per cent.

The Nifty 50 opened at 23,415.95 compared to its previous close of 23,483.55. The benchmark index was trading at 23,388.10, lower by 95.45 points, or 0.41 per cent.

Sectoral trends remain weak

Sectoral performance was largely negative in early trade. The Nifty IT index emerged as the worst-performing sector, declining more than 2 per cent. Other sectors under pressure included FMCG, PSU Bank, Media, Realty, Private Bank, Auto and Pharma.

On the other hand, Nifty Metal, Oil & Gas and Healthcare indices traded with modest gains, supported by strength in commodity-linked stocks.

Asian markets mixed; crude oil rises

Asian markets traded mixed on Wednesday. Japan's benchmark index and Taiwan's market posted gains, while Hong Kong's Hang Seng Index traded lower. GIFT Nifty also indicated a subdued start for Indian equities.

Brent crude oil climbed to around USD 96.85 per barrel, up 0.89 per cent, as investors continued to assess the impact of geopolitical tensions on global energy supplies.

FII selling remains a key concern

Foreign institutional investors (FIIs) continued to reduce risk exposure. Data showed that FIIs' long positions in index futures declined to 8.79 per cent from 9.68 per cent, falling below the 10 per cent mark for the first time since January 20. Their long exposure is also at its lowest level since January 14.

FIIs remained net sellers in the cash market for the fifth consecutive session, offloading shares worth Rs 8,362 crore. Across cash equities, index futures and stock futures, FIIs were net sellers of Rs 4,192 crore.

However, FIIs bought stock futures worth Rs 5,211 crore, with notable buying and short covering seen in IT stocks. Market participants attributed Tuesday's strong second-half recovery partly to this activity.

Domestic institutional investors (DIIs) continued to provide support, purchasing equities worth Rs 9,589 crore for the eleventh straight session.

Global markets hit fresh records

Global market sentiment remained supportive despite geopolitical concerns. The US Dow Jones Industrial Average rose 228 points and closed at a fresh record high for the fifth consecutive session.

The Nasdaq Composite and S&P 500 also ended at record closing highs for the sixth straight day, with the S&P 500 touching a new lifetime high.

In currency markets, the Indian rupee snapped its three-day gaining streak and settled 28 paise lower at 95.27 against the US dollar. The dollar index traded above 99, while the yield on the 10-year US Treasury note remained largely flat at 4.45 per cent.

Commodity prices remained firm. Brent crude rose towards USD 97 per barrel, while industrial metals extended gains. LME copper climbed to a two-week high, aluminium touched its highest level in more than four years, zinc hit its strongest level since August 2022 and lead rose to a four-month high.

Precious metals also advanced, with gold gaining Rs 105 and silver rising Rs 544 in the previous session.