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Informist, Tuesday, Jun. 2, 2026

 

By Arundathi A R

 

MUMBAI – Analysts see the domestic equity indices moving in a range on Wednesday after bucking a four-day losing streak on Tuesday. Market sentiment is more likely to be negative, as the US-Iran conflict is not yet settled. Crude oil prices, hovering around $94 a barrel after Iran's suspension of talks with the US, will be closely tracked, as they play a vital role in determining the market's direction.

 

The Nifty 50 closed 0.4% higher at 23483.55, up 100.95 points. The BSE Sensex ended 0.5% higher at 74649.84, up 382.50 points. "On the downside, immediate support is placed at 23420," Rupak De, senior technical analyst at LKP Securities, said in a note. A breach below this level could trigger another fall towards 23200. On the upside, resistance is positioned around 23600, he said.

 

"While inflation may put some pressure on FY27 (2026–27) margins, moderate earnings growth, alongside improving investor sentiment following a resolution of the West Asia conflict, could support double-digit gains in the index from current levels," said Ashwini Shami, president and chief portfolio manager at Omniscience Capital. He sees valuations as not a major concern despite the possibility of near-term market volatility, as the current price-to-earnings multiple of the Nifty 50 is below its long-term average.

 

Global brokerage Morgan Stanley expects earnings growth among Nifty 50 companies to accelerate in the upcoming quarters, with the recovery likely to be broad-based across sectors, ET Now said in a post on X, citing the brokerage. Earnings growth was subdued in FY26 but is expected to enter a new upcycle going ahead, the brokerage said. However, Morgan Stanley flagged a prolonged war in West Asia and a severe drought due to a weak monsoon as key near-term risks. It also maintained a 'neutral' stance on Indian equities.

 

"Portfolio positioning favours domestic cyclicals over defensives," the brokerage said, while maintaining an 'overweight' call on financials, consumer discretionary, and industrials. Meanwhile, it maintained an 'underweight' stance on energy, materials, utilities, and healthcare.

 

According to Kotak Institutional Equities, the earnings of Indian companies for the March quarter were decent, but the June quarter is likely to face some headwinds due to the West Asia conflict. The earnings outlook for FY27 looks good for now, but might change if the war continues, the brokerage said.

 

"Given that the long-term earnings outlook for index constituents remains in the double digits, any further de-rating would make valuations even more attractive for long-term investors," Shami said. According to him, the liquidity-driven de-rating is likely to reverse in the event of any sharp correction from current levels.

 

Foreign institutional investors were net sellers on Monday as well, net selling shares worth INR 39.12 billion. This was, however, lower than the INR 211.06 billion net sold on Friday. Domestic investors continued with their buying interest Monday, net buying shares of INR 51.09 billion. "The ongoing rotation of global capital toward AI-driven markets like South Korea and Taiwan means Indian equities continue to face outflow pressure," IDBI Capital Equity Research said in its strategy report.

 

The Reserve Bank of India's three-day Monetary Policy Committee meeting, starting Wednesday, will be closely monitored by investors. "With the earnings season largely concluded, investor focus has shifted to key macro factors including monsoon progress, inflation trends, RBI policy, and liquidity conditions," Vinod Nair, head of research at Geojit Investments, said in a note. 

 

The rupee settled at 95.2650 a dollar on Tuesday, 0.3% lower than its previous close. "Rupee movement will continue to be influenced by the dollar index, crude oil prices, and capital flows," Jateen Trivedi, commodity and currency research analyst at LKP Securities, said in a note. "Technically, 94.85 remains an important resistance level, while 95.75 is the next key support zone."  End

 

US$1 = INR 95.2650

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Saji George Titus

 

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