Indian equity benchmarks BSE Sensex and Nifty50 snapped their five-day winning streak on Friday, with the Sensex plunging over 800 points and the Nifty falling below the 24,000 mark, according to an ET report. The sell-off was led by a crash in IT stocks, which fell nearly 6%, dragging down investor sentiment.
IT Stocks Lead the Rout
Technology stocks witnessed intense selling pressure, with heavyweight companies such as Infosys, TCS, Tech Mahindra and HCLTech tumbling by as much as 8%. The weakness followed a fall in Accenture's shares on Wall Street after the global consulting firm lowered its FY26 revenue growth forecast to 3-4%, compared with its earlier guidance of 3-5%. This subdued outlook revived concerns that businesses remain cautious about discretionary spending on IT consulting and digital transformation initiatives, according to the report.
Foreign Institutional Investors Turn Sellers
Foreign institutional investors (FIIs) reversed course on Thursday after three straight sessions of net buying, turning sellers in the Indian market. According to provisional NSE data, FIIs offloaded equities worth Rs 1,025 crore during the session. However, VK Vijayakumar, Chief Investment Strategist at Geojit Investments, noted that the intensity of foreign selling has moderated considerably.
Profit-Taking After Strong Rally
The decline may also have been influenced by investors locking in gains following a robust run. Over the previous five sessions, the Sensex had advanced nearly 5%, while the Nifty 50 climbed more than 4%, supported by optimism surrounding the US-Iran peace agreement. The India VIX, the market's volatility gauge, climbed nearly 5% to 13.30 in early trade, indicating increased caution.
Unfavourable Global Cues
Indian equities were not alone in their weakness, as several Asian markets also traded lower. South Korea's Kospi and Hong Kong's Hang Seng each dropped close to 2%, while Japan's Nikkei posted a subdued performance. Although Wall Street ended higher in the previous session, futures linked to the Dow Jones Industrial Average were trading in negative territory, indicating a potentially weak opening for US markets, the report added.
Lingering Middle East Concerns
While the US-Iran agreement has improved sentiment, geopolitical concerns have not disappeared entirely. US Vice President JD Vance recently criticised what he described as excessive anxiety within sections of the Israeli establishment regarding the deal. Investors remain wary that any deterioration could once again unsettle global markets.
Market Snapshot
| Metric | Value |
|---|---|
| BSE Sensex decline | Over 800 points |
| Nifty50 level | Below 24,000 |
| Nifty IT index fall | Nearly 6% |
| India VIX | 13.30 (up ~5%) |
| FII outflow (session) | Rs 1,025 crore |
| Top IT losers | Infosys, TCS, Tech Mahindra, HCLTech (up to 8% down) |
| Previous 5-session rally | Sensex +5%, Nifty +4% |
For corporate executives and investors, the IT sector rout signals potential headwinds for discretionary tech spending. Companies reliant on IT services may see pressure on margins, while investors should monitor Accenture's guidance as a bellwether for global IT demand. The next major catalyst will be the upcoming quarterly earnings season and any commentary from IT firms on demand recovery.
(Disclaimer: Recommendations and views are those of experts and not of The Times of India.)
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