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.

The leaders of France and the U.K. will gather dozens of countries — but not the United States — on Friday (April 17, 2026) to push forward plans to reopen the Strait of Hormuz, a key oil route choked off by the U.S.-Israeli war on Iran.

The Paris meeting is part of attempts by sidelined nations to ease the impact of a conflict they didn’t start and haven’t joined, but that has sent the global economy reeling. After the war started on Feb. 28, Iran effectively shut the narrow strait through which a fifth of the world’s oil usually passes.

U.S. President Donald Trump on Sunday (April 12, 2026) said his “civilisation will die” remarks brought Iran to the bargaining table for the now failed peace talks, and predicted that they will come back.

“Let me tell you, that statement got them to the bargaining table, and they have it left. They have left the bargaining table. I predict they come back and they give us everything we want,” Mr. Trump told Fox News programme ‘Sunday Futures’.

In a strong denouncement of “outrageous” remarks made by Pakistan Defence Minister Khawaja Asif, Israel has raised doubts about his country’s role as a “neutral arbiter”.

“Pakistan Defence Minister’s call for Israel’s annihilation is outrageous,” the Israeli Prime Minister’s Office said in a post on X.

Iran’s Foreign Ministry on Wednesday (April 8, 2026) thanked Pakistan for its efforts in reaching talks between Iran and the U.S.

In a letter to Prime Minister Shehbaz Sharif and Pakistan’s Chief of Defence Forces Field Marshal Asim Munir, Iran Foreign Minister Abbas Araghchi said, “I express gratitude and appreciation for my dear brothers Prime Minister of Pakistan Sharif and Field Marshal Munir for their tireless efforts to end the war in the region.”

He also said in response to the brotherly request of PM Sharif in his tweet, and considering the request by the U.S. for negotiations based on its 15-point proposal as well as announcement by the President of United States about acceptance of the general framework of Iran’s 10-point proposal as a basis for negotiations, if attacks against Iran are halted, the country will cease their defensive operations.

Read: Iran-Israel war LIVE updates

Tehran said on Wednesday (April 8. 2026) its 10-point plan for securing an end to the war with the United States would require Washington to accept its uranium enrichment program and the lifting of all sanctions. For a period of two weeks, safe passage through the Strait of Hormuz will be possible via coordination with Iran’s Armed Forces and with due consideration of technical limitations, Iran also added.

Mr. Araghchi also said Iran and the U.S. have agreed to an immediate ceasefire everywhere including Lebanon and elsewhere, effective immediately.

Pakistan invites Iran, U.S. to Islamabad to settle disputes

Mr. Sharif invited Iran and the U.S. to Islamabad on Friday (April 10, 2026), to further negotiate for a conclusive agreement to settle all disputes.

“Both parties have displayed remarkable wisdom and understanding and have remained constructively engaged in furthering the cause of peace and stability. We earnestly hope, that the ‘Islamabad Talks’ succeed in achieving sustainable peace and wish to share more good news in coming days.” he added.

Iran’s Foreign Minister has arrived in Geneva ahead of a second round of negotiations with the United States, Iranian state television said Monday (February 16, 2026), as Washington keeps up pressure on the Islamic republic.

According to Tehran, “indirect” Iran-U.S. nuclear talks mediated by Oman will be held on Tuesday (February 17, 2026), although Washington has previously pushed for other topics to be discussed including Iran’s ballistic missiles and support for regional proxies.

Tehran and Washington restarted negotiations this month after previous talks collapsed when Israel launched an unprecedented bombing campaign against Iran last June.

Considerable uncertainty surrounds the fate of Iran’s stockpile of more than 400 kilogrammes of 60-percent enriched uranium that was last seen by nuclear watchdog inspectors in June.

“The Foreign Minister has arrived in Geneva at the head of a diplomatic and expert delegation to take part in the second round of nuclear negotiation,” Iran’s state-run IRIB wrote on its Telegram channel.

During his visit to Geneva, Abbas Araghchi is expected to hold talks with his Swiss and Omani counterparts as well as the head of the International Atomic Energy Agency, Rafael Grossi, and other international officials, Iran’s foreign ministry said.

Washington has dispatched Middle East envoy Steve Witkoff and President Donald Trump’s son-in-law Jared Kushner, the White House confirmed on Sunday (February 15, 2026).

The latest talks follow repeated threats from Trump of military action against Tehran, first over Iran’s deadly crackdown on anti-government protests, and then more recently over the country’s nuclear programme.

The West fears the programme is aimed at making a bomb, which Tehran denies.

On Friday (February 13, 2026), Mr. Trump said a change of government in Iran would be the “best thing that could happen”, as he sent a second aircraft carrier to the Middle East to ratchet up military pressure.

Iran’s Deputy Foreign Minister told the BBC that Tehran would consider compromises on its uranium stockpile if Washington lifts sanctions that have crippled the Islamic republic’s economy.

“If we see the sincerity on their [American] part, I am sure we will be on a road to have an agreement,” said Majid Takht-Ravanchi.

Israeli Prime Minister Benjamin Netanyahu said on Sunday that any deal must involve the removal of all enriched uranium from Iran as well as Tehran’s ability to enrich more.

“There should be no enrichment capability… dismantle the equipment and the infrastructure that allows you to enrich in the first place,” he said during a speech in Jerusalem.

‘Viable’ deal

On February 6, Mr. Araghchi led the Iranian delegation in indirect talks with Mr. Witkoff and Mr. Kushner in Muscat.

Switzerland has played a key role in diplomatic relations between Iran and the United States for decades.

It has represented U.S. interests in Iran since Washington broke off relations with Tehran after the 1980 hostage crisis, a year after the Iranian revolution.

Iranian Deputy Foreign Minister for economic diplomacy Hamid Ghanbari said Tehran was seeking a deal with the United States that would generate economic benefits for both countries, particularly in sectors such as aviation, mining and oil and gas, the Fars news agency reported.

“For the agreement to be viable, it is essential that the United States also be able to benefit from it in areas with strong and rapid economic return potential,” he was quoted as saying.

Iran is ready to consider ​compromises to reach a nuclear deal with the United States ‌if Washington is willing to discuss lifting sanctions, ​Iran’s Deputy Foreign Minister Majid Takht-Ravanchi told ⁠the BBC in an interview published on Sunday (February 15, 2026).

Iran has said it is prepared to discuss curbs on its nuclear programme in ‌return for the lifting of sanctions, but has repeatedly ruled out linking the issue ‌to other questions including missiles.

Mr. Takht-Ravanchi confirmed that a second ‌round ⁠of nuclear talks would take place on ⁠Tuesday (February 17) in Geneva, after Tehran and Washington resumed discussions in Oman earlier this month.

“(Initial talks went) more or less in a ​positive direction, but it is ‌too early to judge,” Mr. Takht-Ravanchi told the BBC.

A U.S. delegation, including envoys Steve Witkoff and Jared Kushner, will meet with the Iranians on Tuesday morning, a source ‌had told Reuters on Friday, with Omani representatives ​mediating the U.S.-Iran contacts.

Iran’s atomic chief said on Monday the country could agree to dilute its ⁠most highly enriched uranium in exchange for all financial sanctions being lifted. Takht-Ravanchi used this example in the ‌BBC interview to highlight Iran’s flexibility.

The senior diplomat reiterated Tehran’s stance that it would not accept zero uranium enrichment, which had been a key impediment to reaching a deal last year, with the U.S. viewing enrichment inside Iran as a pathway to nuclear ‌weapons.

Iran denies seeking such nuclear weapons.

During his first term in ​office, Trump pulled the U.S. out of a 2015 Iran nuclear agreement, known as the ⁠Joint Comprehensive Plan of Action, the signature foreign policy achievement of ⁠former Democratic President Barack Obama.

The deal eased sanctions on Iran in exchange for Tehran limiting ‌its nuclear programme to prevent it from being able to make an atomic bomb.

Iran’s top diplomat insisted on Sunday (February 8, 2026) that Tehran’s strength came from its ability to “say no to the great powers,” striking a maximalist position just after negotiations with the United States over its nuclear program and in the wake of nationwide protests.

Foreign Minister Abbas Araghchi, speaking to diplomats at a summit in Tehran, signalled that Iran would stick to its position that it must be able to enrich uranium — a major point of contention with President Donald Trump, who bombed Iranian atomic sites in June during the 12-day Iran-Israel war.

While Iranian President Masoud Pezeshkian praised the talks on Friday (February 6, 2026) in Oman with the Americans as “a step forward,” Mr. Araghchi’s remarks show the challenge ahead. Already, the U.S. moved the aircraft carrier USS Abraham Lincoln, ships and warplanes to the Middle East to pressure Iran into an agreement and have the firepower necessary to strike the Islamic Republic should Trump choose to do so.

“I believe the secret of the Islamic Republic of Iran’s power lies in its ability to stand against bullying, domination and pressures from others,” Mr. Araghchi said. “They fear our atomic bomb, while we are not pursuing an atomic bomb. Our atomic bomb is the power to say no to the great powers. The secret of the Islamic Republic’s power is in the power to say no to the powers.”

The “atomic bomb’ as a rhetorical device

Mr. Araghchi’s choice to explicitly use an “atomic bomb” as a rhetorical device likely wasn’t accidental. While Iran has long maintained its nuclear program is peaceful, the West and the International Atomic Energy Agency say Tehran had an organized military program to seek the bomb up until 2003.

Iran had been enriching uranium up to 60 per cent purity, a short, technical step to weapons-grade levels of 90 per cent, the only non-weapons state to do so. Iranian officials in recent years had also been increasingly threatening that the Islamic Republic could seek the bomb, even while its diplomats have pointed to Iranian Supreme Leader Ayatollah Ali Khamenei’s preachings as a binding fatwa, or religious edict, that Iran wouldn’t build one.

Mr. Pezeshkian, who ordered Mr. Araghchi to pursue talks with the Americans after likely getting Khamenei’s blessing, also wrote on X on Sunday (February 8, 2026) about the talks.

“The Iran-US talks, held through the follow-up efforts of friendly governments in the region, were a step forward,” the president wrote. “Dialogue has always been our strategy for peaceful resolution. … The Iranian nation has always responded to respect with respect, but it does not tolerate the language of force.” It remains unclear when and where, or if, there will be a second round of talks. Mr. Trump, after the talks on Friday, offered few details but said: “Iran looks like they want to make a deal very badly — as they should.”

Aircraft carrier in the Arabian Sea

During Friday’s (February 6, 2026) talks, U.S. Navy Adm. Brad Cooper, the head of the American military’s Central Command, was in Oman. Cooper’s presence was likely an intentional reminder to Iran about the U.S. military presence in the region.

Mr. Cooper later accompanied U.S. special envoy Steve Witkoff and Jared Kushner, Mr. Trump’s son-in-law, to the Lincoln out in the Arabian Sea after the indirect negotiations.

Mr. Araghchi appeared to be taking the threat of an American military strike seriously, as many worried Iranians have in recent weeks. He noted that after multiple rounds of talks last year, the U.S. “attacked us in the midst of negotiations.” “If you take a step back (in negotiations), it is not clear up to where it will go,” Mr. Araghchi said.

​U.S. President Donald Trump signed an executive order on Friday (February 6, 2026) ​that may ⁠impose a 25% tariff on ​countries ⁠that do business with Iran.

The order ‌comes as ‌tensions between Iran ‍and U.S. continue to ‍simmer even as the two countries engaged in talks this week.