Sensex, Nifty slide 4th day as IT index sinks 6%

What happened on Dalal Street

Indian equity markets extended losses for a fourth straight session as broad-based selling pulled benchmark indices lower. Traders cited weakness across IT, banking, auto, and consumer stocks, with technology shares at the centre of the decline. The selloff came alongside uncertainty around US President Donald Trump’s tariff stance and shifting risk appetite globally. Market participants also pointed to an earnings slowdown narrative and continued foreign selling as factors keeping sentiment fragile. The day’s tone was risk-off, with investors reacting to a mix of global cues and domestic concerns.

Technology stocks led the fall

Technology shares emerged as the biggest drag, with the Nifty IT index slumping nearly 2% at one point, making it the worst-performing sectoral index in that session. Among Sensex heavyweights, Infosys fell 2.78%, TCS declined 2.94%, HCLTech dropped 1.38%, and Tech Mahindra lost 1.61%. The weakness mirrored concerns across global technology stocks as rising US bond yields and expectations of tighter monetary policy weighed on growth-oriented segments. In another stretch of selling pressure, the Nifty IT index plunged 6.02% to 26,752.85, reinforcing the depth of sector underperformance.

Accenture’s guidance added to IT anxiety

A key trigger highlighted in the market commentary was Accenture narrowing its annual revenue growth forecast. The global consulting firm lowered its FY26 revenue growth forecast to 3-4%, compared with its earlier guidance of 3-5%, and issued weaker-than-expected fourth-quarter guidance despite steady quarterly earnings. That outlook revived concerns that businesses remain cautious about discretionary spending on IT consulting and digital transformation. Investors also reacted to management commentary suggesting demand visibility remains weak and clients continue to be cautious on technology spending. The result was a broad wave of selling across Indian IT counters.

Underperformance versus the broader market

The recent decline in IT stood out even as broader indices held up relatively better in comparison over parts of the period. Over the past four trading days, the Nifty IT index slipped 6%, versus a 0.5% dip in the Nifty 50, based on the figures cited. In Tuesday’s trade, IT shares were described as hovering near a three-year low as heavyweights dominated the Nifty top losers list. The divergence signalled sector-specific stress rather than a uniform market breakdown. Still, broader selling pressure was also visible across other pockets including consumer durables and realty.

Foreign selling returned, adding to volatility

Foreign institutional investors (FIIs) reversed course after three sessions of net buying and turned sellers. As per provisional NSE data cited, FIIs offloaded equities worth Rs 1,025 crore during the session. The selling was also linked to profit-taking after a recent rally, as investors locked in gains amid weaker cues. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, was cited saying sustained FII selling continues to pressure largecap stocks. The combined effect was weaker market breadth and higher intraday swings.

Global cues: rates, tariffs, geopolitics, and crude

The market narrative also shifted to US rate signals ahead of the US Federal Reserve monetary policy meeting, with expectations that the Fed may choose not to cut interest rates yet. Uncertainty around Trump’s tariff policy added to the risk premium, especially after remarks warning countries against abandoning newly negotiated trade deals, with the possibility of higher duties under other trade laws. Separately, rising Middle East tensions were cited as a trigger behind another sharp open, pushing up energy concerns. Brent crude, the global oil benchmark, rose 1% to USD 72.13 per barrel, adding to inflation sensitivity.

Domestic factors: monsoon worry, rupee, MSCI-related moves

Domestic concerns also featured prominently, especially around the monsoon outlook. The India Meteorological Department (IMD) was cited forecasting weaker-than-usual monsoon conditions at 90% of its optimum amount, a data point that often affects sentiment due to its linkage with rural demand and agriculture. Currency moves also reflected the cautious tone, with the rupee settling 6 paise lower at 90.95 against the US dollar amid a firm greenback and higher crude prices. Another factor cited was the MSCI rejig, described as a periodic review and adjustment of global stock markets that can trigger late-session flows. These inputs collectively kept traders focused on near-term risk management.

Expiry-day mechanics and risk-off positioning

Tuesday being the weekly expiry for Nifty derivatives contracts was also cited as a volatility driver. On expiry days, traders typically square off or roll over futures and options positions, which can amplify intraday moves. Gaurav Udani, Founder of Thincredblu Securities, described the setup as risk-off, pointing to weak global cues and profit-taking turning cautious sentiment into selling pressure. He also noted Nifty being dragged lower by about 170 points and volatility rising as foreign funds stepped back. While the exact index closing levels were not provided, the comments captured the prevailing trading mood.

Key data points at a glance

Why this move mattered for investors

The session underlined how quickly Indian benchmarks can come under pressure when multiple risk factors converge: global rate expectations, tariff uncertainty, and sector-specific shocks in IT. The concentrated weakness in technology stocks was notable because IT has a heavy influence on benchmark direction and is sensitive to global demand signals. FII selling added another layer of fragility, particularly for largecaps that are widely owned by overseas investors. The monsoon and crude oil signals contributed to inflation and demand sensitivity in market positioning. Near-term volatility also reflected weekly expiry dynamics and flow-related adjustments like MSCI changes.

Conclusion

Markets extended a multi-session decline as IT stocks sold off sharply, FIIs turned net sellers, and global uncertainty around rates, tariffs, and geopolitics weighed on sentiment. Key near-term markers remain the US Fed policy outcome, ongoing global risk cues, and how investors respond to guidance and commentary from large global tech and consulting firms. Domestically, traders will also track monsoon updates after the IMD’s 90% projection and how currency and crude movements feed into risk appetite. With weekly expiry-driven swings already visible, positioning is likely to stay sensitive to headlines and flows.