Morning Session – Indian Financial Market (03 Jun 2026)

Indian Rupee
The Indian rupee opened at 95.4575 against the U.S. dollar on Wednesday, compared to its previous close of 95.2650 on Tuesday. The Indian Rupee weakened against the US Dollar on Wednesday, trading near 95.67 as rising oil prices and consistent foreign capital outflows placed downward pressure on the currency. Global energy costs climbed following renewed US-Iran hostilities, negatively impacting India due to its significant reliance on oil imports, despite reports of central bank intervention to mitigate losses. Meanwhile, investor sentiment remains cautious as Foreign Institutional Investors continue to divest from Indian equities, and market participants await the Reserve Bank of India's upcoming monetary policy decision on Friday, where the repo rate is widely expected to remain steady alongside an anticipated cooling in quarterly GDP growth.

Indian Equities
Indian equity markets opened in the red, with the Sensex falling over 500 points and the Nifty dropping 150 points, largely driven by rising US-Iran tensions and a weaker rupee. While geopolitical concerns and concerns over oil prices weigh on sentiment, experts note that investor focus is currently shifting toward traditional markets and AI-linked stocks, contributing to a broader cooling in institutional demand for cryptocurrencies. Bitcoin has faced downward pressure, slipping toward the $66,000 range amid significant market liquidations and consistent outflows from Bitcoin ETFs. Meanwhile, analysts highlighted the positive long-term outlook for sectors like agriculture and marine exports following the India-Oman Free Trade Agreement, even as domestic markets navigate volatility and shifting global capital flows.

Indian Government Bonds
Indian government bond yields are hovering near 6.99%, steadying ahead of the Reserve Bank of India’s (RBI) upcoming monetary policy announcement. Yields recently retraced from highs following a temporary dip in global oil prices and softer US Treasury yields.

The 10-year benchmark bond yield was trading at 7.003%.