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Sensex falls over 400 points, Nifty below 25,100 amid IT sell-off
At 11:30 AM, BSE Sensex was trading at 82,107.93, down by nearly 400 points or 0.49 per cent. Whereas, Nifty was just a tad up from the 25,000 level, down by over 100 points or 0.45 per cent.
Majority of stocks from the Sensex pack were trading in red. Infosys, Bajaj Finance, Asian Paints, Tech Mahindra and HCL tech were among the top laggards. On the other hand, Eternal (Zomato), Sun Pharma, ITC, Adani Ports and Titan were among the top gainers.
Interestingly, broader markets were performing relatively fine. The Nifty Midcap 100 was trading at 58,810, marginally up by 0.29 per cent. Whereas, the Nifty Smallcap 100 rose by 0.58 per cent, quoting 18,872. Sectorally, the Nifty IT was among the worst-performing indices, down by 1.48 per cent and trading at the 37,136 level. Nifty Bank followed a similar trajectory and was down by 0.22 per cent. Media stocks witnessed strength with the Nifty Media index trading at 1,719, up by 0.92 per cent.
Sectoral play
The majority of the sell-off in the last trading session was driven by IT stocks, following Tata Consultancy Services (TCS) reporting lower-than-expected Q1FY26 earnings. IT stocks, which hold a 14.8 per cent weight in the Sensex, second only to banks, saw broad-based declines. Adding to the pressure, foreign portfolio investors (FPIs) are switching gears, putting a stop to the buying spree. According to National Securities Depository (NSDL) data, equity flows via stock exchanges for July (up to the 11th) show net outflows of ₹555 crore, marking the first negative monthly figure in over three months, after consistent positive inflows in April, May and June.
"Nifty has been exhibiting weak trend weighed mainly by the weakness in the IT stocks. This weakness may persist particularly since the FIIs were big sellers in the cash market last Friday. It is important to note that banking and financials are outperforming even in this weak market. This trend may persist," said VK Vijayakumar, chief investment strategist at Geojit Investments.
What should traders do?
As D-street continues to trade in a range-bound trajectory due to a lack of cues, market analysts suggest that investors take a cautious approach while booking profits during rallies. The Nifty50 is currently trading below the psychological 25,500 level; however, the market tone continues to be cautiously bullish, as per analysts
"In the current environment of heightened volatility and mixed market signals, traders are advised to follow a cautious 'sell on rise' strategy, especially when trading with leverage. Booking partial profits on rallies and using tight trailing stop-losses is recommended to manage risk effectively," said Hardik Matalia, derivative analyst- research at Choice Equity Broking. "Fresh long positions should only be considered if the Nifty sustains above the 25,378 level. While the broader market undertone remains cautiously bullish, it is essential to keep a close watch on key technical levels and global market cues," he said.
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