By Bharath Rajeswaran

Indian benchmarks fell on Tuesday, dragged down by IT stocks on concerns that U.S. interest rates could stay higher for longer, but still posted monthly gains as lower oil prices and measures to attract foreign investment helped stabilise the rupee.

Brent crude ICEEUR:BRN1! fell below levels seen before the Iran conflict, trading at $73 a barrel. It has dropped 42% from its April peak of $126.4, easing pressure on India's current account deficit and inflation outlook.

The Nifty 50 NSE:NIFTY fell 0.34% to 23,865.75, while the BSE Sensex BSE:SENSEX edged 0.33% lower to 76,478.67. For June, the indexes gained 1.4% and 2.3%, respectively.

Banking stocks led monthly gains after the RBI extended a subsidised forex swap facility for lenders' overseas borrowings and allowed banks to lend to non-residents against foreign-currency deposits.

"The combination of lower crude, rupee stability and measures to draw foreign inflows has improved sentiment and liquidity," said Ajit Banerjee, president and chief investment officer at Shriram Life Insurance, adding that markets should look better from the second half if no new risks emerge.

Banks NSE:BANKNIFTY, private banks (.NIFPVTBNK), public sector banks NSE:CNXPSUBANK and financials NSE:CNXFINANCE rose 6.1%, 6.1%, 4.1% and 4.7%, respectively.

While oil prices moderated, U.S. inflation gauges jumped, fuelling expectations that the Federal Reserve could raise rates later in 2026.

IT index NSE:CNXIT fell 2.7% on Tuesday and 9.6% in June as rising U.S. inflation fuelled expectations of Federal Reserve rate hikes later in 2026, raising concerns over client spending. Accenture's weak demand forecast and AI disruption fears also weighed on the sector.

Ten of the 16 major sectors advanced in June. Broader small-caps NSE:CNXSMALLCAP and mid-caps NSE:CNXMIDCAP rose 4% and 0.1%, respectively.

Pharma NSE:CNXPHARMA gained 4%, while metals NSE:CNXMETAL fell 6.9% as Mideast supply fears eased.

Among stocks, IndiGo NSE:INDIGO jumped 21.9% this month, helped by sliding fuel prices.

Eicher Motors NSE:EICHERMOT fell 4.8% on Tuesday after brokerages flagged Royal Enfield as a potential loser from Delhi's new electric vehicles policy.