Morning Session – Indian Financial Market (04 Jun 2026)

Indian Rupee
The Indian rupee opened at 95.70 against the U.S. dollar on Thursday, compared to its previous close of 95.7050 on Wednesday. The Indian rupee opened at 95.70, showing resilience as it holds steady against the previous close despite persistent pressure from significant foreign equity outflows and broader weakness in Asian markets. While geopolitical tensions in the Middle East and concerns over energy import costs continue to weigh on sentiment, the currency is finding support from market optimism regarding potential government measures to bolster inflows, specifically reports of a planned removal of capital gains tax on foreign portfolio investments in government securities.

Indian Equities
Indian stock market has shown resilience, with the Nifty and Sensex recovering from early losses to trade in the green, bolstered by an anticipated reform push and banking sector momentum. Despite continued concerns regarding IT stock sell-offs and regulatory developments involving Rajesh Exports, indices are attempting to sustain recovery following a period of volatility. Market participants are closely monitoring key technical levels, such as the Nifty's support at 23,151 and resistance hurdles near 23,500, while navigating broader economic signals and upcoming policy cues.

Indian Government Bonds
India is reportedly planning to eliminate capital gains tax for foreign portfolio investors on government securities to help attract foreign capital and support the rupee, which has declined by over 5% this year. The government, which also considering the removal of a 20% withholding tax on interest earned from these bonds, aims to align its debt taxation policies more closely with global standards. While a specific effective date for these changes remains unclear, the initiative comes as the country seeks to encourage investment in debt markets following significant net outflows from Indian equities.

The 10-year benchmark bond yield was trading at 7.014%.