Sensex, Nifty start June series on a weak note as IT drags, tariff concerns weigh

IT stocks slump on tariff woes, PSU banks shine, volatility eases

Indian benchmark indices kicked off the June derivatives series on a subdued note on May 30, as optimism over strong foreign portfolio investor (FPI) inflows and domestic growth prospects was overshadowed by caution ahead of GDP data and mixed global cues. Investor sentiment also weakened after a US federal appeals court reinstated steep tariffs on foreign imports, reversing a lower court decision.

At close, the Sensex was down 182.01 points or 0.22 percent at 81,451.01, and the Nifty was down 82.90 points or 0.33 percent at 24,750.70. About 1,751 shares advanced, 2,087 shares declined, and 114 shares unchanged.

Broader markets showed a mixed performance. While smallcap stocks continued to outperform, midcap counters slipped into negative territory. Meanwhile, market volatility remained under control, with the India VIX falling another 2 percent, indicating continued risk moderation.

Sectorally, the Nifty IT index emerged as the biggest laggard. Shares of major tech players—TCS, Infosys, and HCL Technologies—declined by up to 2 percent. The weakness followed a ruling by a US federal appeals court that temporarily restored former President Donald Trump’s wide-ranging tariffs, which had earlier been struck down on grounds of executive overreach.

In contrast, the Nifty PSU Bank index defied the broader market trend, led by gains of up to 3 percent in State Bank of India and Bank of Baroda.

Looking ahead, Akshay Chinchalkar, Head of Research at Axis Securities, noted that the Nifty 50 index has immediate support at 24,677 and resistance at 25,000. He expects the index to remain range-bound in the short term.

Karthik Kumar, Fund Manager at Axis Mutual Fund, echoed this view, pointing out that while the earnings season started strong, it was helped by subdued expectations. Now that market valuations have returned to earlier peaks, further upward movement will depend on upgrades to earnings estimates for the financial years 2025–26 (FY26) and 2026–27 (FY27). Until then, he expects the market to remain stable within a narrow range.

Kumar also highlighted that growth stocks have faced pressure in recent months due to macroeconomic uncertainty and tariff-related concerns emanating from the United States. “Markets penalised growth stocks,” he said in a conversation with CNBC-TV18, but he remains optimistic about a recovery as earnings expectations for FY26 and FY27 begin to stabilise. He continues to favour growth and quality themes as long-term drivers.