Indian stock markets are likely to witness a cautious opening on June 3, with GIFT Nifty indicating a flat-to-negative start for the Sensex and Nifty. Investor sentiment remains under pressure as escalating tensions in the Gulf region have pushed crude oil prices higher, raising concerns over inflation and India's import bill.

Fresh hostilities in the Gulf, coupled with stalled diplomatic efforts between the United States and Iran, have triggered a rise in global energy prices. Brent crude climbed toward the $97 per barrel mark, increasing concerns for oil-importing economies such as India. Higher oil prices could impact corporate margins, inflation expectations, and the country's current account balance.

GIFT Nifty futures were trading marginally below domestic benchmark levels in early trade, suggesting limited downside but a lack of strong bullish momentum. Market participants are expected to remain cautious until there is greater clarity on geopolitical developments and energy prices.

Foreign institutional investors (FIIs) continued their selling streak, offloading Indian equities for a third consecutive session. However, domestic institutional investors (DIIs) remained net buyers and helped cushion the impact of foreign outflows, supporting benchmark indices after recent volatility.

Apart from global developments, investors will also monitor upcoming monetary policy announcements and sector-specific movements. Information technology stocks may remain in focus following weakness in global software shares, while oil-sensitive sectors could react to further movements in crude prices.