Indian equity markets opened sharply lower on Friday, ending a five-session winning streak as heavy selling in information technology stocks weighed on investor sentiment. The decline followed a cautious business outlook from global technology giant Accenture, which sparked concerns about demand trends and discretionary spending in the IT sector.
At the opening bell, the Sensex plunged more than 700 points to trade near 76,700, while the Nifty 50 slipped below the crucial 24,000 mark, reflecting broad weakness across frontline technology stocks.
IT Sector Bears The Brunt
The biggest drag on the market came from the information technology sector. The Nifty IT index tumbled more than 6 percent, emerging as the worst-performing sector of the day.
Major IT companies witnessed sharp declines:
- Infosys fell nearly 7%
- Tech Mahindra dropped over 6%
- HCLTech lost more than 5%
- TCS also traded significantly lower
The sell-off was triggered after Accenture lowered its outlook, raising concerns about slowing technology spending globally and potential pressure on future earnings for Indian IT exporters.
The weakness extended beyond large-cap names, with mid-cap and small-cap technology stocks also trading lower.
Pharma Stocks Offer A Safe Haven
While most sectors traded in the red, pharmaceutical and healthcare stocks bucked the trend as investors shifted towards defensive sectors.
The Nifty Pharma index remained in positive territory, supported by gains in major healthcare companies. Market participants appeared to favour sectors that are generally less vulnerable to economic slowdowns and global demand fluctuations.
Among the top gainers were Sun Pharma, Power Grid Corporation, ICICI Bank and Reliance Industries.
Banking Stocks Limit The Damage
Banking stocks helped cushion some of the market’s losses. The Nifty Bank index declined only modestly compared to the broader market, with private lenders showing relative strength.
ICICI Bank and Kotak Mahindra Bank traded with gains, while HDFC Bank saw only limited selling pressure.
Broader Markets Show Resilience
Despite the sharp fall in benchmark indices, broader markets remained comparatively stable.
Small-cap and mid-cap indices recorded only mild declines, suggesting that selling pressure was concentrated largely in heavyweight technology stocks rather than the broader market.
This resilience indicates that investor confidence in domestic-focused sectors remains intact despite short-term concerns surrounding the IT industry.
Foreign Investors Continue To Sell
Foreign Institutional Investors (FIIs) remained net sellers in the previous trading session, offloading equities worth more than Rs 1,000 crore. However, strong buying from Domestic Institutional Investors (DIIs) helped absorb some of the selling pressure and provided support to the market.
Domestic institutions purchased equities worth over Rs 3,500 crore, reflecting continued confidence in Indian markets.
Key Factors Investors Are Watching
Market participants are closely monitoring:
- Further developments in the global technology sector
- Crude oil price movements
- Progress on India-US and India-UK trade agreements
- Reliance Industries’ key business announcements
- Foreign investor activity
Analysts believe lower crude oil prices and improving macroeconomic conditions remain supportive for the Indian economy. However, IT stocks could continue to face volatility in the near term following the latest guidance concerns from Accenture.
Market Outlook
Experts suggest that while short-term volatility may persist, strong domestic inflows, easing geopolitical concerns and improving economic fundamentals continue to support the broader market. Many analysts believe quality stocks could present buying opportunities on market declines, particularly if broader economic conditions remain favourable.