Indian equity benchmarks opened on a weak note on June 2, with the Sensex falling around 200 points to trade near the 74,100 level. The Nifty also dropped nearly 100 points, hovering around 23,300 in morning deals.

Selling pressure was visible across multiple sectors. Pharma, healthcare, and banking counters saw the most intense selloff, while information technology stocks bucked the trend and attracted fresh buying interest.

Pharma, banking shares under pressure

Heavyweights from the Nifty Bank and Nifty Pharma indices led the decline. Traders cited profit booking after recent gains in defensive sectors. “Investors are rotating money into IT on expectations of a US demand revival, while pharma and PSU banks are seeing some profit-taking,” a Mumbai-based dealer said on condition of anonymity.

The Nifty Bank index slipped over 250 points, dragged by private and public sector lenders. Meanwhile, the Nifty IT index rose nearly half a percent, with majors like Infosys and HCL Tech contributing to the gains.

South Korea overtakes India as sixth-largest market

In a significant global development, South Korea has now overtaken India to become the world’s sixth-largest stock market. According to Bloomberg data, the combined market capitalisation of South Korea’s listed companies surged 86% this year to touch $5 trillion (approximately ₹475 lakh crore).

The sharp rise has been driven by chip-making giants benefiting from the global artificial intelligence boom. In contrast, India’s total market cap has slipped to $4.8 trillion (around ₹456 lakh crore) amid recent foreign outflows and valuation concerns.

This reshuffling underscores how AI-linked demand is reshaping global equity rankings, even as Indian markets grapple with mixed signals from foreign investors.

Mixed cues from Asian peers

Other Asian markets displayed a mixed trend during the morning session. Japan’s Nikkei tumbled over 1,100 points or 1.64%, tracking losses on Wall Street futures. South Korea’s Kospi fell 1.45% to 8,634. However, Hong Kong’s Hang Seng index bucked the trend, rising 0.97% to 25,641.

Overnight, US markets closed with modest gains. The Dow Jones added 46 points, the Nasdaq rose 114 points, and the S&P 500 ended 20 points higher. “US resilience is providing some support, but domestic factors like FII selling are weighing on sentiment,” said a research head at a domestic brokerage.

FIIs continue selling spree

Foreign institutional investors have remained net sellers through May. Data shows that over the past 30 days, FIIs have offloaded Indian equities worth nearly ₹60,000 crore. On the other hand, domestic institutional investors stepped in with net purchases of over ₹87,700 crore during the same period.

In the last seven days alone, FII selling stood at around ₹26,060 crore, while DIIs bought ₹25,694 crore. This tug-of-war between foreign and domestic funds has kept the market range-bound despite pockets of strength.

What lies ahead?

The market had closed lower on June 1 as well, with the Sensex falling 508 points to end at 74,267. Analysts expect volatility to persist through the week, driven by global cues and monthly derivatives expiry. Attention will also remain on the progress of the southwest monsoon and any policy signals from central banks.

For now, investors are advised to stay selective. “IT and select largecaps may continue to see buying, but broader markets could remain choppy,” the dealer added.