Indian equity markets snap 5-day gaining streak, IT drops over 3%
Mumbai, June 19
The Indian equity markets ended in the red on Friday, snapping the five-day gaining streak, with Sensex losing over 600 points and Nifty slightly above the 24,000 mark shedding over 150 points. Sensex closed at 76,802.9, down 607.08 points or 0.78 per cent while Nifty settled at 24,013.10, down 154.90 or 0.64 per cent.
Nifty IT emerged as biggest laggard, falling over 3 per cent with majority of other sectors trading in the red. Following IT, realty and consumer durables also lost over a per cent.
On BSE, Infosys led the major losses, dropping over 6 per cent, followed by TCS, HCL Tech, Tech Mahindra, HDFC Bank among others. On the other hand, Eternal, Bharti Airtel, Power Grid, Trent, NTPC, ITC, LT among others were major gainers on BSE.
Market analyst Vipin Dixena noted, "Today's sharp downturn feels like a classic sector-specific correction rather than a broader market breakdown. IT selloff as overblown reaction to Accenture's guidance cut created an emotional panic that doesn't match the underlying fundamentals."
However, Dixena noted, "smallcaps held their ground with Nifty Smallcap 100 and 250 actually gaining 0.25-0.33 per cent, which tells retail investors aren't losing confidence; they're just rotating out of overvalued large-cap IT into more defensive plays like Power, Telecom, and Pharma."
"Technically, Nifty still holds above 24,000 and closed above today's opening level tells the same story. The broader uptrend structure remains intact with RSI at 67 and MACD positive," he said.
Abhishek Kumar, SEBI RIA, founder SahajMoney noted, "Indian equities closed the session in negative territory, validating the morning's gap down signal as IT sector weakness intensified throughout the day. The Nifty 50 slipped and closed around the psychological 24,000 mark while the Sensex closed near 76,800."
"The landmark US Iran peace deal reports remained a key macro driver, cooling Brent Crude to ~$79/bbl and providing a tailwind for oil sensitive sectors. However, this was largely overshadowed by the hawkish tone from the US Fed and a major IT pack rout (Nifty IT crashed >5 per cent) following global guidance cuts," Kumar said.
While the morning GIFT Nifty signal was already defensive (~24,002), Kumar noted "the final close confirmed the cautious underlying sentiment as the 24k milestone was breached during the trading on the downside."
— ANI
Reader Comments
Interesting to see a US-Iran peace deal impacting oil prices positively but Indian IT getting hammered by Accenture's guidance cut. Global factors really drive our markets these days. I hope the IT sector recovers soon; I have some HCL Tech shares I'm holding for the long term.
Finally a correction after 5 days of green! But this feels like a sector rotation—IT is overvalued and investors are shifting to PowerGrid and NTPC which are gaining. Smart move actually. I booked profits in TCS last week and put some into Bharti Airtel. 😎 Abhi toh weekend hai, market ki tension kal se!
I'm a bit skeptical about the analyst's claim that this is temporary. The US Fed hawkish tone combined with global IT slowdown could signal deeper trouble for Indian IT companies that depend heavily on US clients. The 24,000 level might break next week if more bad news comes. I'm waiting on the sidelines for now. 😐
Ha! Everyone's panicking about IT drop, but look at the smallcap index—still green! That tells you retail investors are not running away, they're just rotating. I'm a chai tapri investor myself and I bought some Pharma stocks today on dip. As our elders say, "Jab tak market hai, tab tak mauka hai!" 📈
Respectfully, I disagree with calling this a 'classic correction'. A 3% IT drop in one day on foreign guidance cuts
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