Stock markets decline in early trade as U.S.–Iran talks face repeated setbacks

Equity benchmark indices Sensex and Nifty declined in early trade on Tuesday (June 2, 2026) as investors remained concerned over the U.S.–Iran situation, with diplomatic efforts to resolve the crisis encountering repeated setbacks.

Persistent foreign fund outflows also hit markets’ sentiment.

The 30-share BSE Sensex declined 296.19 points to 73,971.30 in early deals. The 50-share NSE Nifty dropped 103.30 points to 23,272.25.

From the 30-Sensex firms, Bajaj Finance, Eternal, Bajaj Finserv, Power Grid, Larsen & Toubro and NTPC were among the biggest laggards.

Infosys, Tata Consultancy Services, Tech Mahindra, HCL Tech, Asian Paints and Mahindra & Mahindra were the gainers.

In Asian markets, South Korea’s benchmark Kospi, Japan’s Nikkei 225 index and Shanghai’s SSE Composite index quoted lower, while Hong Kong’s Hang Seng index traded higher.

U.S. markets ended in positive territory on Monday (June 1, 2026).

“The U.S.–Iran situation remains unresolved, with diplomatic efforts encountering repeated setbacks and no definitive breakthrough yet emerging. The prolonged tensions in the Middle East have kept global risk appetite restrained, prompting investors to adopt a more defensive stance amid concerns over regional stability and the broader implications for energy markets,” Ponmudi R., CEO of Enrich Money, an online trading and wealth-tech firm, said.

U.S. President Donald Trump said he persuaded Prime Minister Benjamin Netanyahu to call off the strike on Beirut, following which the Israeli leader “turned his troops around”.

Mr. Trump made the announcement on Truth Social on Monday (June 1) evening amid reports that the conversation between the two leaders was “heated” and the U.S. President telling Mr. Netanyahu that he would have been in prison but for his intervention.

The phone calls came after Iran threatened to end the negotiations with the U.S. over Israel’s attacks on Lebanon.

Meanwhile, Foreign Institutional Investors (FIIs) offloaded equities worth ₹3,911.68 crore on Monday (June 1), according to exchange data.

Brent crude, the global oil benchmark, traded 0.73% lower at $94.29 per barrel.

“The trend of sustained AI trade, new records for markets in U.S., South Korea and Taiwan, sustained FPI selling in India and India’s underperformance are continuing with no immediate signs of reversal,” V.K. Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.

On Monday (June 1, 2026), the Sensex dropped 508.40 points, or 0.68%, to settle at 74,267.34. Falling for the fourth consecutive day, the Nifty edged lower by 165.15 points, or 0.70%, to end at 23,382.60.