IT Stocks Sink Up To 3.5%, Sensex Drops 378 Points Amid Global Risk-Off Mood

Indian benchmark indices traded lower on Thursday as fresh military strikes by the United States on Iran, rising crude oil prices and stronger-than-expected US inflation data triggered a risk-off mood across global markets.

At around 9:35 a.m., the BSE Sensex was down 378.29 points, or 0.51%, at 73,604.89, while the NSE Nifty50 declined 112.40 points, or 0.48%, to 23,102.55.

The weakness came amid renewed geopolitical concerns in West Asia after the United States launched fresh strikes on multiple targets in Iran. US President Donald Trump also warned of further military action if a peace agreement is not reached, adding to uncertainty in global markets.

Crude Oil Rebounds

The escalation in tensions pushed oil prices higher, reviving concerns over inflation and India's import bill.

Brent crude futures rose 1.7% to $94.7 per barrel, reversing part of the recent decline. Higher crude prices are closely watched by investors as they can worsen India's current account deficit, put pressure on the rupee and fuel inflationary risks.

Persistent foreign investor selling also weighed on sentiment. Foreign Institutional Investors (FIIs) remained net sellers, offloading equities worth ₹2,124.98 crore on Wednesday.

IT Stocks Lead Market Decline

Information technology stocks emerged as the biggest drag on benchmark indices, with the Nifty IT index falling more than 2%.

At around 10 a.m., the Nifty IT index was down 2.4% at 27,595, significantly underperforming the broader market. The sell-off followed weakness in global technology stocks and renewed concerns over the impact of artificial intelligence on traditional IT services business models.

HCL Technologies was the biggest loser on the Nifty, declining 3.5%. Infosys dropped 2.5%, while Tech Mahindra, Wipro and Tata Consultancy Services fell between 1.4% and 2%.

The weakness extended to mid-cap technology counters as well. Persistent Systems fell 3.6%, while Coforge declined 2.7%, placing them among the worst-performing mid-cap stocks in early trade.

Inflation Concerns Return

Investor sentiment was also hit after US inflation accelerated to 4.2%, raising concerns that the Federal Reserve could maintain a hawkish stance or even consider additional rate hikes.

Higher US interest rates generally reduce the appeal of emerging market assets by strengthening the dollar and increasing returns on US fixed-income investments.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said the recurring geopolitical tensions in West Asia and elevated inflation remain key concerns for markets.

"The off and on geopolitical drama in West Asia continues with the latest escalation in the conflict pushing Brent crude to $95 again. Inflation in the US has spiked to 4.2% indicating the possibility of rate hike by the Fed," he said.

Vijayakumar noted that further increases in US bond yields could put additional pressure on global equities, particularly technology stocks.

He added that although RBI and government measures have helped stabilise the rupee, they have not been sufficient to improve foreign investor sentiment toward India. According to him, any meaningful shift in FII flows may depend on whether the ongoing correction in global AI-related stocks deepens further.