Indian Stock Market Falls Sharply on June 3: Sensex Drops 636 Points
Sensex saw a big fall on Tuesday, June 3, due to weak global cues, high valuations, foreign capital outflow, and lack of strong corporate earnings. Concerns over the US trade policy and the Russia-Ukraine conflict also added pressure.
Market Performance
- The Sensex started at 81,492.50 and fell nearly 800 points during the day. It closed at 80,737.51, down 636 points or 0.78%.
- The Nifty 50 opened at 24,786.30 and ended at 24,542.50, losing 174 points or 0.70%.
- This was the third straight session of losses for both indices.
Midcap and Smallcap indices also ended lower.
- BSE Midcap fell by 0.52%
- BSE Smallcap dropped 0.07%
The total market capitalisation of BSE-listed companies fell by nearly ₹2.5 lakh crore, from ₹445.50 lakh crore to ₹443 lakh crore, meaning investors lost a large amount in one day.
Expert Analysis on Sensex
Rupak De, Senior Technical Analyst at LKP Securities, said that investors are now waiting for a clear decision from the RBI’s interest rate meeting on June 6.
He added:
- If Nifty goes below 24,500, the market may fall further to 24,000.
- If Nifty stays above 24,500, it might recover and move towards 24,700–24,750.
Five Main Reasons Why the Sensex Fell
1. High Valuation Concerns
Experts believe that Indian stocks are currently overvalued, especially in the broader market. The Nifty 50’s PE ratio is above its 1-year average.
VK Vijayakumar of Geojit Investments said that even though valuations are high, strong retail participation might support prices in the long term.
2. Uncertain US Trade Policy
The global market is worried about US trade policies. Investors fear uncertainty, especially regarding former President Trump’s tariffs.
Tensions between the US and China are also rising, adding to the nervousness.
3. Foreign Capital Outflow
Foreign investors (FPIs) have sold nearly ₹9,000 crore in Indian shares over the last two sessions due to rising US bond yields and high stock prices in India.
Ajit Mishra of Religare Broking said foreign fund selling, global tension, and weak trade deals are hurting market confidence.
4. No New Positive Triggers
The market is not seeing any fresh positive news.
Although Q4 results were okay, they didn’t excite investors.
Motilal Oswal analysts mentioned that many companies are facing downward earnings revisions, which has further weakened sentiment.
All attention is now on the upcoming RBI Monetary Policy Committee meeting on June 6, where a 25 basis point rate cut is expected. But since it’s already predicted, it might not boost the market much.
5. Russia-Ukraine War Escalation
Recent attacks by Ukraine on Russian airfields have led to a fresh wave of tension in the ongoing war.
Ross Maxwell from VT Markets said the conflict has been going on for over three years and still affects global markets, inflation, energy, and investments.
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