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Below the Quote on Daily Market Commentary for Jun 01th, 2026 by By Siddhartha Khemka - Head of Research, Motilal Oswal Financial Services Ltd

Indian equities are expected to remain range-bound with a marginal negative bias in the near term amid persistent Foreign Institutional Investor selling and ongoing uncertainty around global macro developments. With the Q4FY26 earnings season largely concluded and broader markets reporting stronger earnings growth, focus is likely to remain on stock-specific opportunities in the midcap space. Investors will also track the RBI’s June 3–5 policy meeting, while textile stocks may remain in focus following the government’s cotton import duty waiver. Domestic equities remained under pressure on Monday following weakness witnessed on Friday, with the Nifty 50 declining 0.7%, while the Midcap and Smallcap indices corrected 1.5% and 0.9% respectively. The Nifty IT index gained nearly 3%, supported by selective buying after recent underperformance. Persistent Systems (+5%) remained in focus after announcing expansion into Eastern Europe. Foreign Institutional Investors (FIIs) recorded sharp cash market outflows on Friday, largely due to MSCI Global Standard Index rebalancing flows estimated at around Rs 20,600 crore. However, domestic institutional investors absorbed a significant portion of the selling, helping limit the extent of the decline. The Q4FY26 earnings season concluded ahead of expectations, with the MOFSL Universe reporting 16% YoY profit after tax growth versus estimates of 8%, led by BFSI, metals and oil marketing companies. Midcaps reported 36% YoY earnings growth, while the Nifty 50 posted 4% growth, marking its eighth consecutive quarter of single-digit earnings expansion. On the macro front, GST collections for May stood at Rs 1.94 lakh crore, up 3.2% YoY, though moderating from April levels. Bond markets also remained cautious ahead of the RBI’s June 3–5 MPC meeting, with the 10-year G-Sec yield rising to around 7.02%. Commercial LPG prices were raised by Rs 42–53.5 effective June 1, while CNG prices have also seen multiple hikes in recent weeks. The increase in fuel costs is expected to raise operating expenses for logistics, aviation, chemicals and transportation sectors, keeping near-term margin pressure elevated for fuel-intensive businesses. Textile stocks may remain in focus after the government waived customs duty on cotton imports from June 1 to October 30, 2026, aimed at improving raw material availability and easing input cost pressures for the domestic textile industry.

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