Sensex drops 750, Nifty below 24,400; VIX 18.09 on IT selloff

Market opens lower after three-session rise

Indian equities traded lower in early deals on Wednesday, putting a three-session gaining streak at risk. The Sensex slumped more than 750 points to slip below 78,500, while the Nifty 50 declined over 150 points to move below 24,400. The decline came even as the US announced an extension of the ceasefire with Iran, since investors continued to price in uncertainty around West Asia and energy supply routes. Selling was visible in IT, banking, pharma and healthcare counters, with names such as Max Healthcare, ICICI Bank, Axis Bank, HCL Tech and Apollo Hospitals among the laggards. The tone across screens was cautious, with traders focusing on volatility, crude-linked risks, and currency pressure.

Early levels and the day’s tone

In early trade, the Sensex fell as much as about 500 points to 78,779, and the Nifty traded at 24,434, down 142.2 points. Market participants also pointed to the likelihood of a gap-down to range-bound start. Analysts noted that while the broader trend was still positive, profit booking at higher levels and continued foreign institutional investor selling could cap near-term upside. The mixed setup meant stock-specific moves, earnings reactions, and sector rotation were likely to dominate the session.

Volatility jumps as risk appetite cools

Volatility rose alongside the decline in headline indices. India VIX, which tracks expected market volatility, jumped more than 3% to 18.09 in the morning. The move in VIX signalled higher near-term uncertainty, particularly as traders balanced global geopolitical headlines against domestic earnings and sector cues. When volatility rises during a market decline, it typically reflects demand for protection and reduced appetite for leveraged positions.

HCL Tech Q4 disappointment hits IT shares

IT stocks led the fall, triggered by a sharp reaction to HCL Tech’s quarterly outcome. HCL Tech shares were the top losers on the Sensex, crashing more than 9% after its Q4 earnings disappointed investors. The weakness spilled over to other large IT names, with Tech Mahindra, Infosys and TCS falling 2% to 4% as sentiment soured across the pack. On the sector dashboard, Nifty IT declined more than 3%, making it the biggest drag among key sector indices.

FMCG and power offer pockets of support

A few defensives and sector-specific plays offered support amid the risk-off tone. Hindustan Unilever and NTPC gained around 1% and led the gainers on the benchmark index. Sectorally, Nifty FMCG rose around 1%, bucking the broader decline. Nifty Metal was also cited among the top gainers during the early phase of trade. Separately, market commentary highlighted that good results from financials were lending support to that segment, while capital market-related stocks and power-related stocks were doing well.

Broader market outperforms and breadth stays positive

While the benchmarks fell, broader indices held up better. Nifty Midcap 100 and Nifty Smallcap 100 hovered in the green and posted marginal gains, indicating selective buying away from the frontline names. Market breadth on the NSE also remained constructive despite the drop in benchmarks: around 970 stocks declined, 1,576 advanced and 116 were unchanged. This divergence suggested that the sell-off was more concentrated in a few heavyweights and specific sectors such as IT.

US-Iran ceasefire extension, but uncertainty persists

Global cues remained a key overhang. US President Donald Trump said he would indefinitely extend the ceasefire with Iran to allow further peace talks. In a Truth Social post, Trump said his administration, following requests by Pakistani mediators, agreed to “hold our Attack on the Country of Iran” until Iran’s leadership and representatives come up with a unified proposal and discussions conclude. However, investors were spooked by Trump’s simultaneous statement that the U.S. Navy’s blockade of Iran’s trade by sea would continue, which Iran considers an act of war. Analysts noted that Iran’s response was viewed as indifferent and suspect, keeping uncertainty elevated and reinforcing the view that “anything can happen any time.” The Strait of Hormuz also remained congested, adding to risk perception.

Crude remains below $100, rupee weakens, yields rise

Energy and currency signals added to the cautious mood. The effective closure of the Strait of Hormuz had triggered a sharp rally in oil prices and rattled global markets, though prices were still below the crucial $100 per barrel mark. The report also noted that oil had crossed $100 per barrel in March for the first time since Russia’s invasion of Ukraine in 2022. In domestic markets, the rupee weakened further, declining 24 paise to 93.68 against the US dollar in early trade as the dollar strengthened to a one-week high. Bond yields also gained, which further pressured sentiment in equities.

What market participants are watching next

Beyond geopolitics, investors are scanning earnings and sector commentary for cues. One market view highlighted that IT could move into a correction mode following weak commentary from HCL Tech. At the same time, the same view pointed to supportive results from financials and strength in capital market-related and power stocks. Autos and auto ancillaries were flagged as a segment to watch for results that are “likely to be good,” as per the commentary.

Key numbers at a glance

Conclusion

The early drop in Sensex and Nifty reflected a mix of sector-specific selling, a volatility spike, and renewed caution on the US-Iran situation. With HCL Tech’s earnings reaction dragging IT and the rupee weakening alongside higher yields, risk appetite stayed restrained. The market’s next cues are likely to come from ongoing earnings, sector updates in financials, autos and capital market-linked stocks, and further clarity on the ceasefire and shipping conditions around the Strait of Hormuz.