Markets wilt under selling pressure; Sensex drops 345 points on weakness in IT stocks

Indian equity markets came under strong selling pressure on Wednesday, with the benchmark BSE Sensex plunging 345 points and the Nifty 50 slipping below the 25,450 mark. The sharp decline was largely led by losses in heavyweight IT stocks, as investor sentiment turned cautious amid weak global cues and worries over earnings momentum in the tech space.

The Sensex closed at 84,950.25, down 345.12 points or 0.40%, while the Nifty 50 settled at 25,427.60, falling 96.80 points or 0.38%. Most sectoral indices ended in the red, with the Nifty IT index tanking nearly 2.5%, dragging the broader indices lower.

IT Stocks Lead the Fall

Information technology stocks bore the brunt of the sell-off amid renewed concerns over tepid growth in key global markets like the US and Europe. Persistent worries about discretionary tech spending cuts and lower deal conversions continued to weigh on investor confidence.

Among the top losers on the Nifty were Infosys (-2.8%), TCS (-2.4%), HCLTech (-2.7%), and Tech Mahindra (-2.2%). Wipro also fell over 1.8% in today’s session.

“IT stocks have been under pressure due to lack of visibility in deal ramp-ups and ongoing client-side weakness, especially in BFSI and retail verticals in the US. The upcoming earnings season is expected to be muted for the sector,” said Abhilash Narayan, Senior Analyst at SAMCO Securities.

Mixed Global Cues Add to Nervousness

The Indian markets mirrored weakness in global equities, with Asian and European indices trading in the red amid uncertainty over interest rate trajectories in developed markets. The US Federal Reserve’s hawkish commentary has left investors worried about prolonged high interest rates, which could potentially dent global economic growth.

“Markets are taking cues from global central bank statements. With the US Fed remaining non-committal about rate cuts, investors are unsure about growth recovery timelines, which is making them shift focus from rate-sensitive and growth-oriented sectors like IT,” explained Rupesh Choudhary, Head of Research at Indsec Securities.

Midcaps and Smallcaps Outperform

Despite weakness in largecaps, the broader market showed relative resilience. The BSE Midcap and Smallcap indices ended marginally higher, gaining 0.15% and 0.21% respectively, supported by strong buying in select FMCG, healthcare, and PSU stocks.

Shares of IRFC, Bharat Dynamics, Cera Sanitaryware, and BEML were among the prominent gainers in the mid and smallcap segments.

Rupee and Bond Market Update

On the currency front, the Indian rupee weakened slightly to close at ₹83.59 per US dollar, weighed down by foreign fund outflows and dollar strength globally. Meanwhile, India’s 10-year bond yield remained flat at 7.03%, reflecting market expectation of status quo in the upcoming RBI monetary policy review.

Market Breadth and Sectoral Snapshot

The market breadth on the BSE was positive, with 1,950 stocks advancing against 1,673 declines, while 127 stocks remained unchanged.

Sectoral Highlights:

• Nifty IT: -2.5% (Worst performing)

• Nifty FMCG: +0.4%

• Nifty Pharma: +0.3%

• Nifty PSU Bank: +0.2%

• Nifty Auto: Flat

• Nifty Bank: -0.3%

Stocks such as Nestle India, Sun Pharma, and Britannia were among the few gainers in an otherwise weak session.

Investor Outlook: Cautious Tone Ahead of Earnings

The ongoing correction comes just ahead of the Q1FY26 earnings season, with investors keenly watching management commentary, especially in IT, banking, and FMCG sectors. With valuations in some segments running high, any disappointment on the earnings front could trigger further downside.

“We expect near-term volatility to remain elevated. Investors should focus on companies with strong balance sheets, consistent earnings delivery, and sectoral tailwinds. IT stocks may see some more pressure until earnings clarity emerges,” advised Rekha Sharma, Fund Manager at Axis Securities.

Wednesday’s decline in Indian equities signals increasing nervousness among investors as global and domestic headwinds gather momentum. The sustained underperformance of IT stocks, coupled with global macro uncertainty, is expected to keep markets on edge. Investors are advised to remain selective and adopt a sector-rotation strategy to navigate the earnings-heavy July season.