Sensex, Nifty slide in early trade as IT stocks drag markets

Benchmark indices Sensex and Nifty declined in early trade on Thursday, dragged down by sharp losses in IT stocks amid weak US market cues and rising crude oil prices. Analysts warned of continued pressure on technology shares.

Mumbai: Benchmark equity indices Sensex and Nifty declined in early trade on Thursday dragged down by heavy losses in IT stocks such as Infosys and Tata Consultancy Services amid weak cues from US markets.

Extending the previous day’s decline, the 30-share BSE Sensex dropped 421.66 points, or 0.50 per cent, to 83,811.98 in early trade. The 50-share NSE Nifty fell 121.10 points, or 0.47 per cent, to 25,832.75.

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Analysts said rising crude oil prices also added to the cautious sentiment among investors.

Among the Sensex constituents, Infosys, Tech Mahindra, Tata Consultancy Services, HCL Technologies, Eternal, Mahindra & Mahindra, Asian Paints, HDFC Bank, Adani Ports, IndiGo, Maruti Suzuki India and Sun Pharmaceuticals were the laggards.

On the other hand, ICICI Bank, Bharat Electronics Ltd, Bajaj Finance, State Bank of India, Tata Steel, NTPC, Titan, Larsen & Toubro, Axis Bank and Bharti Airtel were among the gainers.

Among sectoral indices, the IT pack slumped the most, diving 3.95 per cent, while the Focussed IT index declined 3.87 per cent on the BSE.

VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said, “Tech stocks, reeling under the ‘Anthropic shock’, are unlikely to recover soon. The sharp dip in the ADRs of top Indian IT companies in the US on Wednesday, indicates that Indian IT will continue to struggle. The switch from IT to other segments will help performing stocks in performing sectors”.

In Asian markets, South Korea’s Kospi advanced over 2 per cent. Japan’s Nikkei 225 index, Shanghai’s SSE Composite index were also traded in the positive territory, while Hong Kong’s Hang Seng index was quoting in the red zone.

The US equities market closed lower overnight deals on Wednesday.

“The latest US jobs data indicating addition of 1,30,000 jobs last month and unemployment falling to 4.3 per cent points to the possibility of no rate cuts by the Fed in the near-term. In India, too, it appears that the rate cutting cycle is over since growth is good and inflation is expected to inch back to the RBI’s long-term target by the end of FY27,” Vijayakumar added.

Meanwhile, Foreign institutional investors bought equities worth Rs 943.81 crore on Wednesday, while domestic institutional investors were the net sellers of stocks worth Rs 125.36 crore, according to exchange data.

Brent crude, the global oil benchmark, went up by 0.46 per cent to USD 69.72 per barrel.

On Wednesday, the 30-share BSE Sensex slipped 40.28 points to close at 84,233.64, while the NSE Nifty inched up 18.70 points to settle at 25,953.85.