Sensex Snaps Winning Streak: IT Selloff and Heavyweight Drags Hit Indices

The Indian equity markets faced a sharp reversal on Friday as the BSE Sensex and NSE Nifty50 ended a five-session winning streak. A massive selloff in technology stocks, compounded by weakness in heavyweights like HDFC Bank and Reliance Industries, pushed the Sensex down by over 600 points.

Tech Sector Slump Triggered by Global Cues

The primary driver of the market decline was a brutal selloff in the IT sector. The Nifty IT index plummeted by more than 6%, hitting its lowest level since April 2023. This volatility was largely triggered by global sentiment following a sharp decline in Accenture’s stock on Wall Street. Accenture’s decision to lower its FY26 revenue growth forecast to 3-4% sparked fears that corporate spending on digital transformation and IT consulting remains cautious.

Indian IT majors felt the brunt of this contagion. Infosys emerged as the biggest loser, with shares sliding nearly 9%. Other significant decliners included Tata Consultancy Services (TCS), which fell 3.53%, HCLTech, which dropped 2.74%, and Tech Mahindra, which ended 2.45% lower. The widespread selling across names like Mphasis and LTIMindtree reflected investor anxiety regarding US-based client spending.

Heavyweights HDFC Bank and Reliance Pull Indices Down

While IT stocks led the decline, the market was further weighed down by large-cap heavyweights. Reliance Industries (RIL) closed at Rs 1,311.50, down 1.25%. This comes amid high-profile developments at the company's 49th AGM, where Chairman Mukesh Ambani announced plans to file the draft red herring prospectus for the Reliance Jio Platforms IPO with SEBI.

HDFC Bank also contributed to the downward pressure, with its shares falling 2.25% to close at Rs 781. The decline was primarily due to the stock trading ex-dividend for a final dividend of Rs 13 per share. Despite the price correction, the move was considered relatively mild when adjusted for the dividend payout. Additionally, the bank noted that the RBI has approved a three-month extension for Keki Mistry's tenure as interim part-time chairman.

Market Statistics at a Glance

The selloff was significant, especially considering the momentum seen in the preceding week. Over the last five trading sessions, the Sensex had gained 4.84% (3,577.43 points), and the Nifty had advanced 4.34% (1,006.4 points).

On Friday, the BSE Sensex ended the session 607.08 points, or 0.78%, lower at 76,802.90. At one point during intraday trading, the index had fallen as much as 940.26 points. The NSE Nifty50 settled at 24,013.10, marking a decline of 154.90 points, or 0.64%. Beyond IT and the heavyweights, stocks like Mahindra & Mahindra and Hindustan Unilever also closed in the red.

Key Takeaways

  • IT Sector Contagion: Global concerns following Accenture's lowered growth guidance triggered a massive selloff in Indian IT stocks, with the Nifty IT index hitting a three-year low.
  • Heavyweight Pressure: Large-cap stocks, including Reliance Industries and HDFC Bank, acted as major drags on the benchmark indices.
  • End of Winning Streak: The sharp decline snapped a five-day rally where the Sensex and Nifty had gained over 4% each.