Indian benchmark indices crashed over 1 per cent in early trade today, i.e. on June 3, 2026. The stock market traded in deep red despite strong global cues. Overnight, Wall Street extended its gains with the S&P 500 closing at a fresh record high. Asian equities followed Wall Street with Japan’s Nikkei scaling new lifetime highs, reflecting continued confidence in global growth and technology-led earnings momentum. According to experts, the strength in global equities suggests that investors are increasingly willing to look beyond near-term geopolitical headlines and focus on underlying economic resilience.
However, in India, the Sensex crashed by more than 889 points, or 1.19 per cent, to 73,759.94, while the Nifty 50 fell by 239.1 points, or 1.01 per cent, to 23,244.45. This came as the India VIX, which measures market volatility, jumped over 8 per cent to 16.62 during trading hours.
What’s behind the fall?
Here are certain factors that have probably led to the crash in equity benchmark indices on Wednesday:
Fresh Middle East tensions
The situation in West Asia remains a key risk factor behind the market crash. “Fresh comments from US officials regarding Iranian activity around the Strait of Hormuz have once again brought energy security concerns into focus,” said Hariprasad K, SEBI-registered Research Analyst and Founder, Livelong Wealth.
Surge in crude oil prices
Crude oil prices remain elevated amid a lack of clear progress in ongoing talks between the United States and Iran. Brent crude futures climbed toward USD 97 per barrel today. Back home, MCX crude oil price rose as much as 1 per cent to Rs 9,039 per barrel.
Persistent selling by FIIs
Foreign Institutional Investors (FIIs) remained net sellers for the fifth consecutive trading session on June 2, 2026, offloading equities worth Rs 8,362 crore, reflecting continued caution among overseas investors.
RBI MPC Meeting
Domestically, markets are entering a crucial phase ahead of the RBI policy decision. “After recent volatility, traders are likely to remain selective rather than aggressively directional. Any indication on liquidity, growth outlook, or inflation management could significantly influence short-term market sentiment,” Hariprasad K said.
Volatile IT Stocks
IT stocks dragged as investors booked profits amid stretched valuations after a strong run-up.
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(This article is for informational purposes only and should not be construed as investment, financial, or other advice.)
