Market Update: Nifty dips as RBI holds rates, FIIs continue selling pressure | 05 Jun 2026
Key Highlights
Indian equities closed lower after the Reserve Bank of India maintained its repo rate, while foreign institutional investors remained net sellers. Global markets presented a mixed picture, with Asian indices mostly down.
Indian equity benchmarks ended lower on Friday, with the declining after the Reserve Bank of India’s Monetary Policy Committee (MPC) unanimously decided to keep the policy repo rate unchanged at 5.25% for the fourth consecutive time. This decision, coupled with persistent foreign institutional outflows, weighed on market sentiment, despite domestic institutional investors providing crucial support.
Market Snapshot
| Index | Last |
|---|---|
| Nifty 50 | 23,366.70 (-0.21%) |
| Nifty Bank | 54,496.25 (+0.35%) |
| Nifty Midcap 100 | 60,754.90 (-0.35%) |
Institutional Flows
(FIIs) continued their selling streak, offloading equities for the fifth consecutive session. (DIIs), however, remained net buyers, providing crucial support to the market.
| Date | FII Net (₹ Cr) | DII Net (₹ Cr) |
|---|---|---|
| 2026-06-04 | -4,447.06 | 4,360.14 |
| 2026-06-03 | -5,616.56 | 5,740.89 |
| 2026-06-02 | -8,362.92 | 9,589.32 |
| 2026-06-01 | -3,911.68 | 5,109.13 |
| 2026-05-29 | -21,105.86 | 16,764.14 |
Looking at the breakdown, FIIs were net sellers in equities by ₹5,066.38 crore on June 4, 2026, while also pulling out ₹453.04 crore from the debt market. This trend of FII outflows across both equity and debt segments highlights a cautious stance from foreign investors.
Sector Performance
The Nifty Realty and PSU Bank indices led the gains, while the IT sector faced significant selling pressure.
| Sector | Last |
|---|---|
| Nifty Realty | 768.90 (+0.56%) |
| Nifty PSU Bank | 8,259.05 (+0.48%) |
| Nifty Pharma | 24,248.05 (+0.29%) |
| Nifty FMCG | 48,302.45 (+0.18%) |
| Nifty Financial Services | 25,056.80 (+0.10%) |
| Nifty Auto | 26,165.95 (+0.08%) |
| Nifty IT | 29,010.30 (-0.99%) |
Top Movers
Adani Enterprises and Hindustan Unilever were among the top Nifty gainers, while Hindalco Industries and Wipro saw significant losses.
Gainers
| Symbol | Company | Last |
|---|---|---|
| ADANIENT | Adani Enterprises Ltd. | 3,048.20 (+2.54%) |
| HINDUNILVR | Hindustan Unilever Ltd. | 2,121.50 (+2.02%) |
| ADANIPORTS | Adani Ports and Special Economic Zone Ltd. | 1,824.20 (+1.86%) |
| BAJFINANCE | Bajaj Finance Ltd. | 889.40 (+1.72%) |
| AXISBANK | Axis Bank Ltd. | 1,272.30 (+1.52%) |
Losers
| Symbol | Company | Last |
|---|---|---|
| HINDALCO | Hindalco Industries Ltd. | 1,092.60 (-2.93%) |
| WIPRO | Wipro Ltd. | 198.37 (-2.91%) |
| TRENT | Trent Ltd. – Series N1 | 2,774.20 (-2.23%) |
Global Cues
Asian markets settled mostly lower on Friday, with South Korea’s Kospi dropping over 5% amid a major sell-off in artificial intelligence and semiconductor stocks. Investors are awaiting the key US jobs report due later in the day. US markets, however, ended mostly in the green on Thursday, buoyed by progress toward ending the Iran war, though a chip selloff limited Nasdaq’s gains. US nonfarm business sector labor productivity rose by 0.3% in Q1 2026.
Economy & Macro
India’s Foreign Direct Investment (FDI) equity inflows increased by 18% to $58.84 billion in 2025-26, with total FDI rising 17% to $94.5 billion. Singapore was the largest source of FDI, contributing $19.8 billion, while investments from the United States more than doubled. The OECD projects India’s real GDP to grow by 6.3% in FY27 and 6.4% in FY28, noting that rising inflation is likely to weigh on private consumption.
RBI & Policy
The Reserve Bank of India’s Monetary Policy Committee kept the repo rate unchanged at 5.25%. Consequently, the standing deposit facility (SDF) rate remains at 5.00% and the marginal standing facility (MSF) rate and the Bank Rate at 5.50%. The MPC also decided to continue with its neutral stance. CPI inflation for 2026-27 is projected at 5.1%. Separately, the government has announced measures to deepen the G-Secs market and enhance FPI participation in the equity segment, including exempting FPIs from income tax on interest income and capital gains from G-Secs.
Inflation
Wholesale Price Index (WPI) inflation sharply accelerated to 8.30% in April 2026, up from 3.88% in March, primarily driven by a significant rise in prices of crude petroleum, natural gas, and mineral oils amid geopolitical conflict.
Watch
- Hexagon Nutrition Ltd.: IPO open June 5-9, 2026, with a price band of ₹42-45 per share.
- Genxai Analytics Ltd.: IPO open June 5-9, 2026, with a price band of ₹110-116 per share.
- UHM Vacation Ltd.: IPO open June 4-8, 2026, with a price band of ₹157-166 per share.
- Vahh Chemicals Ltd.: IPO open June 4-8, 2026, with a price band of ₹60 per share.
- CMR Green Technologies Ltd.: IPO open June 3-5, 2026, with a price band of ₹182-192 per share.
& Bond Markets
The Indian Rupee strengthened against the US dollar in early trade on Friday, trading at 95.33, stronger by 41 paise from its previous close of 95.74. Bond yields also traded lower, with yields on new 10-year Government Stock down 4 basis points at 6.95% from its previous close of 6.99%.
Corporate & Earnings
- Sagar Cements Ltd.: Board approved the merger of Andhra Cements Limited with Sagar Cements Limited.
- RBL Bank Ltd.: Announced allotment of ESOPs.
- Ion (India) Ltd.: Released earnings call transcript.
- Vodafone Idea: Launched Silent Mobile Verification across Meta Platforms.
- TVS Motor Company: TVS HLX series crossed 5 million in global sales.
- Hindalco Industries: Aims for ₹1,000 crore revenue from Aluminium Windows by FY29.
- Aurobindo Pharma: Received USFDA final approval for Tofacitinib Tablets.
- JK Lakshmi Cement: Approved investment in SPVs DynoSpark and Elevate Solar Energy for solar power.
The RBI’s decision to hold rates signals continued caution on inflation, even as it revised down GDP forecasts for FY27, indicating a watchful approach to economic stability.
Persistent FII outflows, despite robust DII buying, suggest that global factors and risk aversion continue to influence foreign investor sentiment towards Indian equities.