Indian shares may extend their gains for the tenth straight day on Tuesday, as strong FII flows and the strengthening rupee indicate an improvement in the near-term outlook for the markets.
If the government continues to show the resolve to reduce fiscal deficit, it is likely that the rupee will strengthen further, thus helping ease price pressures and paving the way for interest rate cuts sooner rather than later.
Leading foreign banks including Morgan Stanley, Deutsche and Citi have upped their Sensex targets yesterday, citing improving global liquidity and the slew of economic reform measures initiated by the rejuvenated UPA government.
Having said that, profit taking after recent steep gains, especially in pharma, FMCG and IT stocks could result in some volatility.
Indian shares pared early gains on Monday after the Reserve Bank of India in its mid-quarter monetary policy review left interest rates unchanged but lowered the cash reserve ratio for banks by 25 basis points, walking a delicate tightrope between growth and inflation. Notwithstanding the volatility, the benchmark 30-share Sensex ended the session up 78 points or 0.42 percent at 18,542, a fresh 14-month closing high, while the broader Nifty index rose by 32 points or 0.58 percent to 5,610.
Provisional data released by BSE shows that foreign institutional investors continued to remain net buyers in Indian equities and bought shares worth Rs. 2,252.10 crore yesterday, while domestic financial institutions offloaded shares to the extent of Rs.837.72 crore.
Corporate News
An inter-ministerial group reviewing coal block allocations has recommended that the bank guarantees furnished by Tata Power and Hindalco for developing a coal block in Jharkhand be forfeited.
Reliance Cement Company, the subsidiary of Reliance Infrastructure, has commercially launched its product, marking its entry into the commercial cement market.
Tribhovandas Bhimji Zaveri said it is foraying into East India by inaugurating 2 new showrooms at Camac Street & Kankugachi in Kolkata today.
Selan Exploration Technology received board approval to buy back its equity shares from the open market at a price not exceeding Rs.350/- a share.
Tech Mahindra said it bought a 51 percent stake in Comviva Technologies, a Bharti Group-owned mobile value-added services provider, for Rs 260 crore.
Asian Oilfield Services has bagged a contract worth around Rs. 32 crore from Geo Enpro Petroleum for carrying out seismic data acquisition and processing in their operational block in Kharsang, Arunachal Pradesh.
Asian Markets
Asian markets are trading mostly lower as weak economic data from the U.S. and an escalation of hostilities between China and Japan over a group of disputed islands prompted investors to take some profits off the table following recent steep gains. Key benchmark indexes in Australia, China, Hong Kong, Singapore and Taiwan are down between 0.1 percent and 0.4 percent.
U.S. And European Markets
U.S. stocks fell modestly overnight, as traders cashed in on last week's Federal Reserve-inspired rally. Disappointing manufacturing data also weighed on stocks, with the New York Federal Reserve reporting that conditions for New York manufacturers have deteriorated further in September. The Dow and the S&P 500 slid about 0.3 percent each, while the tech-heavy Nasdaq edged down 0.2 percent.
European stocks finished with modest losses on Monday as the Fed-inspired cheer faded and investors shifted their focus back to the region's debt crisis. France's CAC 40 retreated 0.8 percent, the U.K.'s FTSE 100 slid 0.4 percent and the German DAX edged down 0.1 percent.
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Market Analysis
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.