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Persistent West Asia tensions, foreign fund outflows drag markets lower
Jun-05-2026

Indian markets ended lower in passing week amid tensions in West Asia after Hezbollah rejected a new ceasefire agreement with Israel, and sustained foreign fund outflows. Traders also remained cautious after the RBI’s projection of higher retail inflation at 5.1% for FY27 from 4.6% earlier, along with downward revision of GDP forecast to 6.6% for FY27 from the 6.9% earlier. 

Some of the major developments during the week are:

India’s IIP growth rate with revised base year stands at 4.9% in April: The MoSPI has revised the base year of the All India IIP from 2011-12 to 2022-23 with objective of making index more representative of current structure and dynamics. The IIP growth rate for April 2026 is 4.9% as compared to April 2025.

India manufacturing activity strengthens: India’s manufacturing sector growth accelerated further in the month of May 2026, with quicker increases in buying levels, new orders and output, despite cost pressures. HSBC India Manufacturing Purchasing Managers’ Index (PMI) rose to 55.0 in May from 54.7 in April.

Govt’s gross GST collections up 3.2% in May: The government data has showed that gross GST collections rose 3.2% to Rs 1,94,184 crore in May 2026 compared to Rs 1,88,172 crore in May 2025 on account of improved supplies of goods and services, and continued expansion of collection from imports.

India’s services sector growth accelerates in May: India’s services sector continued to witness robust expansion in May 2026. HSBC India Services PMI Business Activity Index surged to 59.8 in May from 58.8 in April. HSBC India Composite PMI Output Index also jumped to 59.3 in May as against 58.2 in April.

RBI keeps policy rate unchanged at 5.25%: Amid rising geopolitical tensions in West Asia and concerns over inflationary pressures, the Reserve Bank of India's Monetary Policy Committee (MPC) unanimously decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 5.25%.

BSE movement for the week

The Bombay Stock Exchange (BSE) Sensex slipped 532.40 points or 0.71% to 74,243.34 during the week ended June 05, 2026. On the sectoral front, S&P BSE Power was down by 247.83 points or 2.96% to 8,135.27, S&P BSE Realty was down by 119.35 points or 1.95% to 5,995.84 and S&P BSE Fast Moving Consumer Goods was down by 337.84 points or 1.85% to 17,926.82 were the top losers, while S&P BSE Consumer Durables was up by 968.49 points or 1.68% to 58,654.45, S&P BSE BANKEX was up by 347.36 points or 0.57% to 61,478.62 and S&P BSE Consumer Discretionary Goods & Services was up by 26.55 points or 0.29% to 9,211.43 were the few gainers on the BSE.

NSE movement for the week

The Nifty slipped 181.05 points or 0.77% to 23,366.70. On the National Stock Exchange (NSE), Nifty Mid Cap 100 decreased 968.90 points or 1.57% to 60,754.90, Bank Nifty was up by 257.05 points or 0.47% to 54,496.25, and Nifty IT was down by 69.85 points or 0.24% to 29,010.30, while Nifty Next 50 lost 881.70 points or 1.24% to 70,191.95.

FII transactions during the week

Foreign Institutional Investors (FIIs) were net sellers in equity segment in the week, with gross purchases of Rs 146,889.68 crore and gross sales of Rs 185,741.31 crore, leading to a net outflow of Rs 38,851.63 crore. They also stood as net buyers in the debt segment with gross purchases of Rs 10,868.23 crore against gross sales of Rs 6,906.30 crore, resulting in a net inflow of Rs 3,961.93 crore. In hybrid segment, FIIs stood as net sellers, with gross purchases of Rs 134.23 crore and gross sales of Rs 160.52 crore, leading to a net outflow of Rs 26.29 crore. (Provisional)

Industry and Economy

The Finance Ministry, in its latest Monthly Economic Review, has said that the near-term outlook for the Indian economy is one of cautious resilience. It added that, with a below-normal monsoon forecast and a likely moderation in economic activity, overall consumption demand may face headwinds in the coming months. However, the ministry noted that domestic fundamentals remain broadly intact, manufacturing and services PMIs are in expansionary territory, the labour market is stable, and foreign exchange reserves provide meaningful insulation against external shocks. It said the Indian economy maintained its growth momentum in April 2026, with E-way bill generation, PMI indices and electricity consumption remaining in expansionary territory.

Outlook for the coming week

Indian equity benchmarks closed the passing week in red with Sensex and Nifty falling with cut of over 0.70% each, amid continued foreign fund outflows and tensions in the West Asia. Besides, the Reserve Bank of India kept interest rates unchanged, while investors assessed the central bank's outlook on inflation, growth and the rupee.

In the coming week, on the economic data front, market participants will be looking ahead to the Consumer Price Index (CPI) data to be out on June 12. Also, traders will be watching for bank loan and deposit growth data as well as foreign exchange reserves data on the same day.

On the global front, investors would be eyeing few economic data from world’s largest economy, United States (US), starting with Consumer Inflation Expectations on June 08, followed by ADP Employment Change, Balance of Trade, Redbook, Existing Home Sales on June 09, API Crude Oil Stock, Core Inflation, EIA Crude Oil Stocks, Monthly Budget Statement on June 10, Producer Price Index, Initial Jobless Claims on June 11, Michigan Consumer Sentiment and Baker Hughes Oil Rig Count on June 12.

Top Gainers 

  • Titan Company up by 4.55% was the top gainer on Nifty for the week - Titan caught investors’ attention after it unveiled growth roadmap for jewellery business. The company is aiming for revenue CAGR of around 20% for FY26 to FY30 and expand store count to around 1,400 by FY30.
  • Adani Enterprises up by 3.77% was another top gainer on Nifty for the week - Adani Enterprises traded higher along with other Adani group stocks after the group companies reported a record capital expenditure of Rs 1.53 lakh crore and an all-time high EBITDA of Rs 94,834 crore in FY26, while maintaining leverage below the group’s stated target.

Top Losers 

  • NTPC down by 6.53% was the top loser of the week on Nifty - NTPC came under pressure on account of profit booking post its Q4 numbers. The company reported 37.78% rise in its consolidated net profit at Rs 10486.47 crore for Q4FY26 as compared to Rs 7611.22 crore for the same quarter in the previous year.
  • Ultratech Cement down by 4.96% was another top loser of the week on Nifty - Ultratech Cement traded lower amid concerns over cement demand moderation in FY27. India Ratings and Research said that cement demand is likely to moderate to mid-single-digit levels in FY27 from about 8% in FY26 amid inflationary pressures and the possibility of an El Nino weather event.

Technical viewpoints

During the week, CNX Nifty touched the highest level of 24,002.80 on June 1 and lowest level of 23,151.50 on June 3. On the last trading day, the Nifty closed at 23,366.70 with weekly loss of 181.05 points or 0.77 percent. For the coming week, 23,011.20 followed by 22,655.70 are likely to be good support levels for the Nifty, while the index may face resistance at 23,862.50 and further at 24,358.30 levels.

US Market

The U.S. markets traded mostly higher during the week after the Institute for Supply Management said its manufacturing PMI rose to 54.0 in May from 52.7 in April, with a reading above 50 indicating growth.

Some of the major developments during the week are:  

U.S. weekly jobless claims climb in week ended May 30: Initial jobless claims climbed to 225,000, an increase of 13,000 from the previous week's revised level of 212,000.

Factory orders in U.S. spike in April: Factory orders soared by 4.8 percent in April after jumping by an upwardly revised 1.8 percent in March.

U.S. private sector job growth modestly exceeds estimates in May: Private employment shot up by 122,000 jobs in May. Street expected private sector employment to surge by 117,000 jobs.

Services index in U.S. rises in May: The Institute for Supply Management said its services PMI rose to 54.5 in May from 53.6 in April, with a reading above 50 indicating growth. 

Construction spending in U.S. increases in April: Construction spending climbed by 0.4 percent to an annual rate of $2.172 trillion in April after rising by 0.2 percent to a revised rate of $2.164 trillion in March.

European Market

European markets traded mixed during the passing week, as the mood in the market remained cautious with investors focusing on the latest developments in the Middle East.

Some of the major developments during the week are:

Eurozone manufacturing activity growth slows: The manufacturing Purchasing Managers' Index fell to 51.6 in May from a near four-year high of 52.2 in the prior month. 

Eurozone inflation strongest since 2023: Inflation rose to 3.2 percent in May from 3.0 percent in April. This was the strongest rate since September 2023, when inflation was 4.4 percent.

Spain industrial output expands for second month in April: Industrial output grew by calendar-adjusted 2.0 percent on a yearly basis, slightly faster than the 1.9 percent rise in March. 

Eurozone retail sales fall more than forecast: Retail sales fell 0.4 percent on a monthly basis in April, in contrast to the 0.8 percent rise in March. Sales were expected to drop 0.3 percent.

German retail sales fall less than forecast: Retail sales fell 0.3 percent on a monthly basis in April, the same pace of decline as seen in March. Sales were forecast to decline 0.4 percent.

Asian Market

Asian markets, barring shanghai composite index, traded in green during the passing week as investors monitored the latest developments in the Middle East.

Some of the major developments during the week are:

Japan household spending slips in April: Household spending in Japan dropped 0.5% Y-o-Y in April 2026, easing from a 2.9% decline in the prior month and beating market expectations for a 1.5% fall.

Japan monetary base slumps in May: Japan’s monetary base declined by 12.2% year-on-year in May 2026, exceeding market estimates for a 9.5% fall and worsening from an 11.3% drop in the previous month.

China service sector growth accelerates in April: The RatingDog China General Services PMI increased to 54.4 in May 2026 from 52.6 in April, surpassing forecasts of 52.3. It marked the strongest growth in the services sector since February.

China manufacturing growth softens in April: The RatingDog China Manufacturing PMI eased to 51.8 in May 2026 from an over five-year high of 52.2 in April, but came in above forecasts of 51.4.

Hong Kong retail sales hit 3-month low: Retail sales in Hong Kong grew by 6.4% year-on-year in April 2026, slowing from 9.8% in the previous month. It marked the weakest annual growth since January.
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