Sensex tumbles 700 pts, Nifty below 24,600 as IT, metal stocks crash; India VIX up 7%

Laggards on the index were HDFC Bank, Dr Reddy's, Reliance Industries, L&T, and HCL Tech

Benchmark indices Nifty and Sensex opened weak on Monday, June 2, extending their rough phase amid lingering global jitters. Fresh tariff threats from U.S. President Donald Trump kept investors cautious, while a sharp sell-off in IT and metal stocks weighed on sentiment. Broader markets followed suit, deepening the overall decline.

At about 9:25 am,  the Sensex was down 722.98 points or 0.89 percent at 80,728.03, and the Nifty was down 195.15 points or 0.79 percent at 24,555.55. About 1,241 shares advanced, 1,679 shares declined, and 179 shares were unchanged.

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Experts say that the current market setup suggests that the consolidation phase is likely to continue. Global concerns, such as renewed tariff threats, are expected to limit any strong rally, even as domestic factors help cushion the downside. The recent announcement by US President Donald Trump to impose 50 percent tariffs on steel and aluminium signals ongoing volatility in global trade will act as a drag on sentiment.

On the brighter side, India’s macroeconomic backdrop remains solid. The better-than-expected Q4 GDP growth of 7.4 percent, along with encouraging trends in both consumption and capital expenditure, points to a supportive environment.

Sectoral indices painted a mixed picture on Monday, with most trading in the red. Nifty Metal and Nifty IT were the worst performers, slipping 1.4 percent and 1.2 percent, respectively, while Nifty Consumer Durables and Private Bank indices also saw notable declines. Auto and Bank indices were down around 0.6 percent each. On the other hand, Nifty PSU Bank led the gainers with a 0.52 percent rise, followed by marginal gains in Energy and Pharma. The India VIX spiked over 7 percent to 17.09, reflecting heightened volatility.

The broader Nifty Midcap 100 and Smallcap 100 slipped 0.26 percent and 0.42 percent, respectively.

From a stock-specific lens, M&M traded lower due to weak overall mood. This comes despite the company reporting a sharp rise in monthly sales in May as healthy demand for SUVs continues to rise. The Thar-maker reported a 17 percent year-on-year increase in May, selling over 84,110 vehicles across domestic and export markets. The company sold over 52,000 SUVs in May, marking a 21 percent rise compared with the same month last year.

Shares of Indian Renewable Energy Development Agency (IREDA) also fell as the lock-in period for a large chunk of its equity comes to an end. Roughly 53.8 crore shares—equivalent to 20 percent of the company’s outstanding equity—will become eligible for trading, marking the expiry of a six-month lock-in, according to Nuvama Alternative & Quantitative Research.

Shares of Tata Motors slipped over a percent in morning trade on June 2 after the company's vehicle sales nosedived 8.6 percent year-on-year in May 2025, as weakness in the domestic market weighed on overall performance. The automaker sold 70,187 vehicles across domestic and international markets last month, compared to 76,766 units in May 2024.

"After spending the last two weeks in a consolidation phase, the Nifty is expected to make a directional move soon. Holding above the 20-day exponential moving average (20-DEMA), currently around 24,600, will be essential to maintain a positive tone. A decisive breach of this level could trigger further profit-booking, dragging the index down toward the 24,200 mark. Conversely, a strong close above 25,200 could rekindle bullish momentum and open the path toward the 25,600+ zone," Ajit Mishra of Religare Broking said.

Apollo Hospitals, HUL, SBI, SBI Life Insurance, and Tata Consumer Products were the top gainers on the Nifty. Laggards on the index were HDFC Bank, Dr Reddy's, Reliance Industries, L&T, and HCL Tech