Sensex down 400 pts, Nifty below 24,650 as bank, IT stocks fall; mid, smallcaps shine

Laggards on the bank included Adani Enterprises, Adani Ports, L&T, Bajaj Finance and ICICI Bank.

Benchmark indices Nifty and Sensex slipped for a third consecutive session on June 3, weighed down by selling pressure in bank, FMCG, and IT stocks during early trade. Despite this, the broader market showed resilience, outperforming the frontline indices once again. Notably, Nifty Bank touched a record high before pulling back into negative territory.

At about 9:30 am, the Sensex was down 386.01 points or 0.47 percent at 80,987.74, and the Nifty was down 99.20 points or 0.40 percent at 24,617.40. About 1906 shares advanced, 900 shares declined, and 132 shares were unchanged.

In the previous session, Indian equities slipped back into the red, ending marginally lower after a brief recovery, as selling pressure resurfaced in the final stretch. Weakness in IT, metal, pharma, and oil & gas stocks weighed on sentiment, even as broader market resilience stood out, with mid and smallcaps reversing early losses firmly in the green.

Follow our LIVE blog for all the latest market updates

"Supportive domestic macro indicators include a potential RBI rate cut, a better monsoon, Q4 GDP data and better GST collection. Under the current market landscape, investors are adopting a cautious short-term strategy, with a focus on domestically oriented and interest-sensitive sectors," Vinod Nair of Geojit Investments Limited said.

On the NSE sectoral front, India VIX jumped 1.5 percent to 17.42, reflecting increased market volatility. Among sectors, Nifty Smallcap 100 and Nifty Metal led the gains, rising 0.55 percent and 0.42 percent, respectively, while Nifty Midcap 100 and Nifty Oil & Gas also posted healthy gains. Realty and PSU bank indices saw modest increases, up 0.22 percent and 0.17 percent. On the downside, Nifty Private Bank declined 0.7 percent, dragging Nifty Bank down by 0.29 percent. Other sectors like FMCG, IT, infrastructure, and pharma saw marginal losses, indicating a cautious trading session with mixed sentiment across the market.

Adani Ports and Adani Enterprises emerged as the biggest laggards on the index following a Wall Street Journal report revealing that US prosecutors have launched an inquiry into whether the companies were involved in importing Iranian petrochemical products. The investigation focuses on allegations that Adani’s firms may have brought Iranian liquefied petroleum gas (LPG) into India through the Mundra port, which is operated by the group. The report noted that certain tankers frequently travelling between Mundra and the Persian Gulf exhibited patterns consistent with efforts to evade sanctions.

Swiggy shares gained 2 percent after Morgan Stanley initiated coverage on Swiggy with an "overweight" rating on Tuesday, assigning a price target of Rs 405—about 22 percent higher than Monday’s closing price and slightly above its IPO price of Rs 390 per share. The brokerage’s bullish view is driven by three key factors: Swiggy’s improving execution in its core food delivery business, the growing total addressable market (TAM) in quick commerce, and the company’s aggressive investment strategy.

Zomato shares rose on June 3 after Morgan Stanley reiterated the stock as its top pick, citing strong leadership in food delivery and quick commerce, robust unit economics, and a healthy balance sheet. The brokerage raised its forecast for India’s quick commerce market, projecting a $57 billion TAM by 2030, up from $42 billion earlier, driven by rapid customer and city additions. Improved margin outlook for food delivery also supported sentiment, lifting investor confidence in the stock. The price target is Rs 320, reflecting an upside potential of 32 percent from the last closing price.

Nifty continues to hover in a narrow band between 24,500 and 25,000, indicating a phase of consolidation. Despite a gap-down start on Monday, it managed to close above its 20-day EMA, showing some buying interest at lower levels. However, the RSI’s negative divergence and bearish crossover reflect weak momentum. Immediate support is placed at 23,630, where its 20-day EMA is placed, while positional support lies at 24,500–24,550. Resistance levels are marked at 24,860 and 25,070. The trend remains sideways with a slight negative bias unless a range breakout occurs.

Shriram Finance, Eternal, Tata Steel, Eicher Motors, and Hero MotoCorp were the top gainers on the Nifty. Laggards on the bank included Adani Enterprises, Adani Ports, L&T, Bajaj Finance and ICICI Bank.