Benchmark indices ended their three-session winning streak on Wednesday, dragged down by a significant sell-off in IT stocks amid renewed geopolitical concerns, particularly over stalled US-Iran peace talks, which dampened recent market optimism.
The Nifty 50 index fell by 198.50 points, or 0.81 percent, closing at 24,378.10, while the Sensex dropped 756.84 points, or 0.95 percent, finishing at 78,516.49.
The Nifty IT index was the primary contributor to the decline, plummeting nearly 4 percent as disappointing quarterly earnings and cautious guidance from major players unsettled investor confidence. HCL Technologies was notably hard-hit, experiencing a nearly 10 percent drop following weak fourth-quarter results. This negative sentiment affected other major IT firms including Infosys and TCS, as well as mid-cap IT companies.
The sell-off signifies deeper issues within the sector, with indications of slowing global tech expenditure and rising costs associated with AI investments beginning to compress margin expectations across the board. Shrikant Chouhan, Head of Equity Research at Kotak Securities, remarked on the market’s movement, stating, “…after a gap-down open, the market slipped below the 24,500/79,000 support zone and throughout the day faced consistent selling pressure at higher levels…” He cautioned that as long as the Nifty remains below 24,500, weak sentiment is likely to persist, with further potential declines toward 24,200.
Geopolitical tensions further exacerbated market conditions. US President Donald Trump’s unilateral extension of the ceasefire, lacking a clear agreement from Iran, failed to restore market confidence. The ongoing US naval blockade and unresolved issues concerning the Strait of Hormuz constrained investors’ risk appetite. Bhuvan Gupta, Chief Investment Officer at Client First Capital, noted the long-term economic implications, saying, “…our reliance on the West Asian region for 60 percent of our energy needs will certainly begin to show up on the books of Indian corporates…” He estimated a potential cut of 9–10 percent in FY27 corporate earnings should crude prices remain in the $80–$120 range without a timely resolution to the conflict.
Notably, not all sectors suffered losses. Energy and defense stocks rose by over 1 percent, bolstered by high crude prices and persistent geopolitical tensions. The FMCG sector exhibited relative resilience, buoyed by robust quarterly earnings from Nestle India. Additionally, the Nifty Chemicals, Realty, and Oil & Gas indices closed with gains. Broader market performance was also positive, with the Nifty Midcap 100 rising 0.19 percent and the Smallcap 100 gaining 1.13 percent, indicating selective buying despite declines in the main indices.
On the Bombay Stock Exchange, 2,391 stocks advanced while 1,895 declined, reflecting a narrower breadth compared to Tuesday. The India VIX index increased by over 4 percent to above 18.26, indicating heightened near-term risk perception. Furthermore, 152 stocks hit 52-week lows—an important figure for market watchers.
The Indian rupee continued its downward trend, weakening to approximately 93.80 against the dollar, marking its third consecutive session of decline. Factors contributing to this pressure include ongoing foreign institutional investor (FII) outflows, the dollar’s strength, and rising crude prices. Brent crude traded near $95 per barrel, with domestic crude futures around ₹8,500, raising concerns regarding inflation and import expenses.
In the face of uncertainty, precious metals garnered interest, with gold rising nearly 1 percent and silver advancing over 1.8 percent in domestic markets. Safe-haven demand remained robust, and technically, gold support is positioned near ₹1,51,000, with resistance around ₹1,55,000, although conflicting signals from the White House regarding ceasefire conditions have kept the market volatile.
Abhinav Tiwari, a research analyst at Bonanza, summarized the prevailing sentiment: “…until stability returns, we are likely to prefer selective stock picking over broad market exposure…”
Looking forward, market participants are focused on the US-Iran negotiations, with any breakdown in talks perceived as a significant downside risk. The upcoming US Federal Reserve policy decision on April 29 is also anticipated as a key macroeconomic trigger.
Domestically, the earnings calendar remains active, with anticipated results from SBI Life, Trent, Tech Mahindra, and Havells likely to influence stock-specific movements.
On a broader time scale, Vikas Gupta of OmniScience Capital expressed optimism, indicating that “…the market is significantly undervalued and even at moderate earnings growth rates returns are likely to be quite rewarding for long-term investors who can tolerate volatility,” projecting the Nifty to range between 28,000 and 31,000 by March 2027.
