Sensex Slumps 600 Points as IT Selloff and Heavyweight Drag Break Winning Streak

The Indian equity markets faced a sharp reversal on Friday, snapping a five-session winning streak as heavy selling pressure gripped major indices. While the Nifty50 managed to hold its position above the 24,000 mark, the BSE Sensex tumbled by over 600 points, driven by a massive selloff in technology stocks and weakness in heavyweight blue-chip companies.

IT Sector Under Siege Following Accenture’s Weak Guidance

The primary catalyst for the market's decline was a brutal selloff in the technology sector. The Nifty IT index emerged as the day's worst performer, plunging over 6% to hit its lowest level since April 2023. This downturn was triggered by global contagion after the US-based consulting giant, Accenture, slashed its FY26 revenue growth forecast to 3-4%, down from its previous guidance of 3-5%.

Investors reacted fearfully to the news, anticipating that corporate clients may reduce discretionary spending on digital transformation. On Dalal Street, the impact was severe: Infosys led the carnage with a nearly 9% drop, while Tata Consultancy Services (TCS) fell 3.53% and HCLTech declined 2.74%. Other major players like Tech Mahindra and Mphasis also saw significant losses, reflecting a broader sentiment of caution regarding the US market exposure of Indian IT firms.

Heavyweights HDFC Bank and Reliance Drag Benchmarks

The market decline was not limited to the tech sector. Significant pressure came from index heavyweights HDFC Bank and Reliance Industries Limited (RIL), which weighed heavily on both the Sensex and Nifty50.

HDFC Bank shares dropped 2.25% to close at Rs 781. This decline was partly attributed to the stock trading ex-dividend for its final dividend of Rs 13 per share. Despite the price adjustment, the bank remained in focus following the RBI's approval of a three-month tenure extension for Keki Mistry as interim part-time chairman.

Simultaneously, Reliance Industries closed down 1.25% at Rs 1,311.50. The volatility came amidst the company's 49th AGM, where Chairman Mukesh Ambani announced that the draft red herring prospectus for the Reliance Jio Platforms IPO would be filed with SEBI.

Market Summary: Breaking the Bullish Momentum

The Friday session represented a significant cooling period after a robust rally. Over the preceding five trading days, the Sensex had gained 4.84% (3,577.43 points) and the Nifty had advanced 4.34% (1,006.4 points).

The BSE Sensex ended the session at 76,802.90, down 607.08 points or 0.78%. At one point during intraday trading, the index saw an even sharper decline, touching a low of 76,469.72. The NSE Nifty50 settled at 24,013.10, marking a decline of 154.90 points or 0.64%. Aside from IT and banking, stocks like Mahindra & Mahindra and Hindustan Unilever also closed in the red, adding to the cautious atmosphere fueled by fresh geopolitical concerns.

Key Takeaways

  • IT Sector Volatility: A weak growth outlook from US-based Accenture triggered a massive selloff in Indian IT stocks, sending the Nifty IT index to its lowest level in over three years.
  • Heavyweight Impact: The decline was exacerbated by major index constituents, including HDFC Bank (impacted by ex-dividend trading) and Reliance Industries.
  • End of Winning Streak: The market reversal halted a strong five-day rally where the Sensex had previously gained nearly 5%.