Indian stock markets closed sharply lower as benchmark indices S&P BSE Sensex and NSE Nifty50 fell over 1% each on the back of heavy selling in IT stocks, extending losses on Dalal Street. The Sensex tumbled 856.55 points to close at 74,454.41, while the Nifty50 declined by 242.55 points to settle at 22,553.35.
Key Factors Behind the Market Decline
Analysts attributed the market’s downward trajectory to a combination of global economic headwinds, foreign investor outflows, and sector-specific underperformance.
Vinod Nair, Head of Research at Geojit Financial Services, noted that persistent global volatility has created uncertainty among retail investors, who typically have a lower risk appetite. He added that while some sectors showed resilience, overall market sentiment remained weak due to macroeconomic concerns and global cues.
Another major factor affecting the Indian stock market was continued selling by Foreign Institutional Investors (FIIs). Vaibhav Vidwani, Research Analyst at Bonanza, explained that FIIs have been reducing their exposure to Indian equities in favor of Chinese markets, which are currently benefiting from economic recovery initiatives and cheaper valuations.
“The ‘Sell India, Buy China’ trend is impacting Indian equities negatively, as investors are seeing better opportunities in China’s recovering economy,” Vidwani added.
Sectoral Performance: IT Stocks Drag Markets Lower
The IT sector was the biggest loser of the day, with major tech stocks facing heavy selling pressure:
- Wipro plunged 3.69%, leading the losses.
- HCL Technologies dropped 3.28%.
- Tata Consultancy Services (TCS) declined 2.91%.
- Infosys fell 2.79%.
Meanwhile, metal stocks also underperformed, while FMCG and auto sectors managed to hold firm, providing some relief to investors.
Top Gainers and Losers
Despite the broad sell-off, a few stocks managed to post gains:
- Mahindra & Mahindra led the top gainers list, rising 1.51%.
- Dr. Reddy’s Laboratories advanced 1.14%.
- Eicher Motors climbed 1.01%.
- Hero MotoCorp added 0.79%.
- Kotak Mahindra Bank gained 0.58%.
On the losing side, apart from IT firms, Oil and Natural Gas Corporation (ONGC) saw a sharp decline of 2.38%.
Broader Market Performance and Outlook
Broader indices also ended lower, with midcap and smallcap indices mirroring the losses in the benchmark indices, shedding nearly 1% each.
Analysts suggest that the market could remain under pressure in the near term, especially if global uncertainty persists and FIIs continue their selling streak. The focus will now shift to corporate earnings, inflation data, and global economic cues to gauge the market’s next move.
