Markets Close Lower Despite FII Tax Relief

New Delhi, June 5, 2026: Indian equity markets ended in the red on Thursday despite the government’s ordinance aimed at providing tax relief to Foreign Institutional Investors (FIIs). Investors remained cautious after the Reserve Bank of India (RBI) maintained its repo rate and revised its GDP growth forecast downward. Markets Close Lower Despite FII Tax Relief

Sensex and Nifty End Lower

The BSE Sensex closed at 74,243.34, declining 116.67 points (0.16%), while the NSE Nifty 50 settled at 23,366.70, down 49.85 points (0.21%).

Although the markets opened on a positive note following the government’s move to address tax concerns for foreign investors, selling pressure emerged during the trading session, limiting gains and pushing benchmarks into negative territory.

RBI Policy and Growth Forecast Impact Market Mood

Market experts noted that investors were disappointed by the RBI’s decision to keep the repo rate unchanged while lowering the country’s GDP growth forecast from 6.9% to 6.6%.

According to market analysts, the central bank’s policy highlighted its commitment to maintaining macroeconomic stability but failed to provide a strong catalyst for equities. Markets Close Lower Despite FII Tax Relief

The RBI also announced measures aimed at improving foreign capital inflows and reducing tax-related hurdles in bond markets, which are expected to support the Indian rupee and attract global investors.https://hindtalks.com/indian-banking-credit-growth-to-moderate-to-12-13/

Global Geopolitical Concerns Add Pressure

Global uncertainty continued to impact investor sentiment. Ongoing tensions in the Middle East, including concerns surrounding the Israel-Lebanon ceasefire and developments related to the Strait of Hormuz, raised worries about energy supply disruptions Markets Close Lower Despite FII Tax Relief.

Brent crude oil traded near USD 94.64 per barrel, while crude oil prices remained elevated, keeping inflation concerns alive for global markets.Markets Close Lower Despite FII Tax Relief

Rupee Strengthens Against Dollar

One positive development was the strengthening of the Indian rupee, which moved below the ₹95 per US dollar mark. Analysts attributed this improvement to the RBI’s measures focused on attracting foreign investments and supporting currency stability.

Nifty Continues Consolidation Phase

Technical experts observed that the Nifty remains in a consolidation zone, trading within a narrow range over the last several sessions. The index continues to trade below its 20-day and 50-day Exponential Moving Averages (EMA), indicating caution among traders.Markets Close Lower Despite FII Tax Relief

Broader Markets Remain Weak

The broader market also witnessed pressure:

Nifty Midcap 100 Index fell 0.35%
Nifty Smallcap 100 Index slipped 0.06%

Market breadth remained mixed, with nearly equal numbers of advancing and declining stocks, reflecting a lack of strong directional conviction among investors.

Conclusion

Despite government efforts to boost foreign investment through tax relief measures, concerns over slowing economic growth, cautious RBI commentary, and global geopolitical uncertainties kept Indian equity markets under pressure. Investors are expected to closely monitor upcoming economic data, global developments, and RBI signals for further market direction.Markets Close Lower Despite FII Tax Relief