Sensex, Nifty extend slide: IT stocks drag markets lower; what to expect next

Indian equity benchmarks extended their decline on Tuesday, with information technology (IT) stocks leading the losses. The 30-share BSE Sensex pack dropped 249.70 points or 0.33 per cent to settle at 76,478.67, while the NSE Nifty50 index declined 80.50 points or 0.34 per cent to close at 23,865.75.

Major drags on the Sensex included Infosys Ltd, ICICI Bank, Tata Consultancy Services (TCS), Reliance Industries Ltd (RIL), State Bank of India (SBI), ITC Ltd, Axis Bank Ltd, HCLTechnologies Ltd, Hindustan Unilever Ltd (HUL) and Larsen & Toubro Ltd (L&T).

The broader indices, however, finished in positive territory, with Nifty Midcap100 rising 0.37 per cent and Nifty Smallcap100 climbing 1.02 per cent.

Ajit Mishra, SVP (Research) at Religare Broking, said, "Markets traded in a volatile yet narrow range on the monthly expiry day and settled marginally lower, extending the ongoing consolidation phase."

Why IT stocks tumble

Sub-index Nifty IT plunged 2.73 per cent today. Mishra noted, "Concerns over the possibility of higher interest rates in the US continued to weigh on technology stocks. The IT pack witnessed broad-based selling amid fears that elevated borrowing costs could delay discretionary spending by global clients."

Meanwhile, Ankur Punj, MD & Business Head at Equirus Wealth, said the domestic indices are effectively pricing in slower revenue growth, weaker pricing power, uncertainty over AI's impact on staffing, and softer margins over the next 12–24 months.

"Rather than fearing a collapse in earnings, investors are assigning lower valuation multiples to the sector. Management commentary is likely to remain cautious. Deal wins may improve, but their conversion into revenue could remain slow. Earnings downgrades also remain a key risk," he added.

Sensex, Nifty outlook

From a technical perspective, Sachin Gupta, VP- Technical Research at Choice Broking, said, "Immediate support for Nifty50 is placed in the 23,650–23,700 zone, while resistance is observed in the 24,000–24,050 range. In the derivatives segment, notable call writing was observed at the 23,900 and 24,000 strikes, while put writing was concentrated at 23,900 and 23,800 levels, suggesting immediate resistance around the 24,000 mark while support remains near the lower strikes."

For Sensex, Hitesh Tailor, Technical Research Analyst at Choice Equity Broking, stated, "The overall market bias remains cautiously positive as long as the 30-share index sustains above the 76,000–76,100 support zone. On the upside, immediate resistance is placed around 76,800–77,000. A decisive breakout above this zone could strengthen the bullish momentum, while failure to hold above the support zone may trigger further consolidation in the near term."