Closing Bell: Nifty Ends in Red as IT Stocks Crash 5.5% on Profit Booking While Banking Stocks Buck the Trend

3 Jun 2026 , 06:01 PM

The Indian benchmark indices ended lower on June 3, 2026, with Nifty slipping to 23,405 and Sensex declining 303 points to close at 74,346, as a sharp 5.57% crash in IT stocks following aggressive profit booking after the recent AI-driven rally weighed heavily on the indices. Rising crude oil prices near $97 per barrel, renewed US-Iran tensions, and investor caution ahead of the RBI’s monetary policy decision on June 5 added to the pressure. Banking stocks were the standout exception, with Nifty Bank surging 471 points as investors rotated into value-oriented financial stocks amid the broader weakness.

Market Overview: Nifty, Sensex, and Bank Nifty Performance

• Nifty 50 closed at 23,405.60 down 77.95 points 0.33%)
• Sensex ended at 74,346.17, down 303.67 points (0.41%)
• Nifty Bank settled at 54,185.95, up 471.30 points (0.88%)

Top Gainers

1. Apollo Hospitals Enterprise Limited– closing at 8,299.00 up by 2.59%

2. Tata Motors Passenger Vehicles Limited – closing at 398.00 up by 2.00%

3. Max Healthcare Institute Limited – closing at 965.00 up by 1.72%

4. State Bank of India – closing at 971.50 up by 1.55%

Top Losers

1. Tata Consultancy Services Limited – closing at 2,245.00 down by 8.25%

2. Tech Mahindra Limited – closing at 1,470.00 down by 6.45%

3. HCL Technologies Limited – closing at 1,177.50 down by 5.31%

4. Infosys Limited – closing at 1,220.50 down by 3.96%

5. Wipro Limited – closing at 203.90 up by 2.83%

Trending stocks

1. Inter Globe Aviation Limited –

• Closed at ₹4,550.10, up 1.88%

• Shares of IndiGo gained nearly 2% after the airline strengthened its market leadership position and benefited from positive policy support from the government.
• Benefited from Air India Capacity Cuts: Air India’s decision to reduce 22% of domestic flights and 27% of international flights between June and August created an opportunity for IndiGo to capture additional passenger traffic.
• International Market Share Improved: IndiGo’s international passenger share increased to 47.5%, supported by operational normalization and market share gains from competitors facing network disruptions.
• Government’s ATF Stabilisation Fund Boosted Sentiment: Investor confidence improved after the Union Cabinet approved a ₹10,000 crore Aviation Turbine Fuel (ATF) Price Stabilisation Fund, which is expected to help airlines manage fuel cost volatility.

Sectoral Performance Index

Indices	Change
Nifty IT	-5.57%
Nifty Realty	-1.39%
Nifty FMCG	-1.01%
Nifty Consumer Durables	-0.81%
Nifty PSU Bank	1.70%
Nifty Private Bank	0.70%
Nifty Financial Service Ex-Bank	0.38%
Nifty India Defence	0.38%
Nifty Pharma	0.33%

 

Sectoral Performance & Key Reasons

Nifty IT (-5.57%)

• IT stocks emerged as the worst-performing sector as investors aggressively booked profits after the Nifty IT index rallied nearly 5–7% over the previous two sessions on AI optimism and strong global software earnings.
• Weakness in ADRs of major companies such as Infosys and Wipro signalled global profit-taking, which further impacted domestic sentiment.
• Investors also reassessed whether AI-led demand can translate into meaningful near-term revenue growth, leading to broad-based selling across TCS, Infosys, HCL Tech, Wipro, Tech Mahindra, LTIMindtree, Persistent Systems, and Coforge.

Nifty Realty (-1.39%)

• Realty stocks declined as rising crude oil prices and renewed geopolitical tensions increased concerns around inflation and interest rates.
• Investors remained cautious ahead of the RBI policy decision, as higher inflation could limit the scope for future rate cuts, which is negative for the real estate sector.

Nifty PSU Bank (+1.70%)

• PSU Banks emerged as the top-performing sector as investors rotated into value-oriented financial stocks after recent underperformance.
• Expectations that government-backed banks could benefit from stable credit growth and relatively attractive valuations supported buying interest.

Nifty Private Bank (+0.70%)

• Private banks gained on selective accumulation despite broader market weakness.
• Investors continued to favour quality lenders with strong balance sheets and stable earnings visibility ahead of the RBI policy announcement.

 

Main Reasons for Stock Market down Today

1. Renewed Uncertainty Over US-Iran Peace Deal
   Investors turned cautious after fresh hostilities in the Middle East raised doubts over a possible US-Iran peace agreement. Escalating tensions increased fears of prolonged geopolitical instability and potential disruptions to global energy supplies, hurting overall market sentiment.
2. Rising Crude Oil Prices Increased Inflation Concerns
   Brent crude rose close to $97 per barrel, while WTI crude also moved higher as concerns over Middle East supply disruptions intensified. Higher oil prices are negative for India as they increase import costs, inflationary pressures, and corporate operating expenses, weighing on equities.
3. Sharp Profit Booking in IT Stocks
   The Nifty IT index fell 5.57%, making it the worst-performing sector of the day. After a strong rally over the previous two sessions driven by AI optimism and global tech strength, investors booked profits in major IT stocks such as TCS, Infosys, HCL Tech, and Tech Mahindra, dragging benchmark indices lower.
4. FII Outflows and Rupee Weakness Pressured Markets
   Foreign Portfolio Investors (FPIs) continued to remain net sellers, creating liquidity pressure in the market. At the same time, the Indian rupee weakened to around 95.60 per US dollar, raising concerns about imported inflation, capital outflows, and India’s current account deficit.
5. RBI Policy Meeting Kept Investors on the Sidelines
   Investors remained cautious ahead of the Reserve Bank of India’s monetary policy decision on June 5. Concerns that the RBI may maintain a cautious stance due to rising inflation risks and elevated crude oil prices led to reduced risk-taking and weaker market participation.

Summary-

June 3, 2026, witnessed a volatile trading session in the Indian stock market as geopolitical concerns, rising crude oil prices, and heavy profit booking in technology stocks weighed on investor sentiment. While banking stocks provided some support, weakness in the IT sector dragged the broader market lower.

• IT stocks emerged as the biggest drag on the market, with the Nifty IT index plunging 5.57% as investors booked profits after the sector’s sharp AI-driven rally over the previous two sessions.

• Realty, FMCG, and Consumer Durable stocks remained under pressure due to concerns over rising inflation, elevated crude oil prices, and uncertainty surrounding future interest rate movements.

• PSU Banks and Private Banks outperformed, supported by value buying, attractive valuations, and expectations of stable credit growth despite broader market weakness.

• Defence and Pharma stocks showed resilience, benefiting from their relatively defensive earnings outlook and continued optimism around long-term growth opportunities.

With the Nifty 50 falling 77.95 points (-0.33%), Sensex declining 303.67 points (-0.41%), and Bank Nifty rising 471.30 points (+0.88%), market sentiment remained cautious due to renewed uncertainty surrounding the US-Iran peace process, crude oil prices nearing $97 per barrel, continued FII outflows, rupee weakness around ₹95.60 per US dollar, and investor caution ahead of the RBI’s upcoming monetary policy decision.