- Benchmark indices opened lower with IT sector leading the decline, dragging Nifty down by 120 points
- Nifty fell 0.97% to 23,938 and Sensex dropped 1.07% to 76,578 in early trade
- IT stocks declined sharply after Accenture's weak revenue outlook disappointed investors
Benchmark indices stayed in negative territory in early trade, with selling pressure visible across sectors, specifically IT. Despite accounting for only about 8.5% of the Nifty 50's weight, the sharp selloff in IT stocks dragged the benchmark index down by more than 120 points.
Nifty fell as much as 0.97% to 23,938, whereas Sensex fell 1.07% in trade to 76,578 in early trade. Nifty is trading 0.86% lower, and Sensex is trading 0.97% lower as of 9:40 am.
Most sectors are trading in red, with Defence, Pharma, Media and Energy as exceptions. IT is leading the decline, falling as much as 6.44% in early trade.
The broader market is trading mixed with the Nifty Smallcap 250 rising 0.17%, and the Nifty Midcap 150 dropping about 0.26%.
Here's three reasons why markets are crashing on Friday:
IT Stocks Sell-Off
IT stocks across the board are seeing red after Accenture's weaker-than-expected guidance intensified concerns around the outlook for Indian tech companies. The global consulting and technology services giant has cut its revenue outlook for the current quarter, disappointing investors despite reporting healthy profitability.
Among frontline IT stocks, Infosys led the decline, falling 8.01%, followed by Mphasis (-6.10%), TCS (-5.84%), Tech Mahindra (-5.44%) and HCL Technologies (-5.01%). The sharp correction came amid a broader selloff in the IT pack, with investors reacting to concerns around demand trends and a potentially weaker outlook for the sector.
Thin Global Trade
Global trading activity remained thin with markets in the US and China closed, reducing participation across major asset classes.
Investors also kept a close watch on the Middle East, where smaller military skirmishes continued despite the absence of a broader escalation.
Buzz Around Lebanon Ceasefire Breach
There are reports that at least four people were killed in southern Lebanon after Israeli drone strikes hit two vehicles in the town of Mayfadoun, with a separate strike also reported in nearby Shoukin. The attacks came despite a ceasefire agreement aimed at easing tensions along the border, raising fresh concerns about the durability of the truce and the risk of renewed hostilities in the region.
These reports have worried investors, also resulting in brent crude prices inching towards $80 per barrel again.
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