Nifty Snaps Five-Day Rally; Sensex Falls 732 Points As IT Stocks Tumble Nearly 6%

Indian equity benchmarks snapped their five-session winning streak on Friday, weighed down by a sharp sell-off in information technology stocks after Accenture cut its guidance, triggering concerns over demand prospects for the sector. The decline came despite supportive macroeconomic factors, including falling crude oil prices, a stronger rupee and signs of moderation in foreign institutional investor (FII) selling.

The Sensex fell 732.19 points, or 0.95%, to close at 76,677.79, while the Nifty declined 200.10 points, or 0.83%, to settle at 23,967.90. Market breadth remained weak, with 956 shares advancing against 1,324 declines.

Among Nifty constituents, Adani Enterprises, Cipla, Bajaj Auto, ICICI Bank and Max Healthcare were among the top gainers. Infosys, TCS, Tech Mahindra, HCL Technologies and Wipro emerged as the biggest losers.

IT Stocks Lead Market Decline

Technology shares bore the brunt of the selling pressure after weak guidance from Accenture sparked concerns about global IT spending.

The Nifty IT index plunged 5.83%, making it the worst-performing sectoral index by a wide margin. Heavyweights Infosys, TCS, HCL Technologies, Wipro and Tech Mahindra dragged the benchmark indices lower.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said Accenture's guidance cut had triggered a sell-off in the ADRs of Indian IT majors, which spilled over into domestic markets.

"Guidance cuts by Accenture have triggered sell-off in Indian IT majors' ADRs. This can cause correction in IT stocks in the domestic market too. Buying can emerge at lower levels in IT since valuations are becoming attractive," he said.

Apart from IT, the Nifty Realty index declined 0.84%, while Bank Nifty, Financial Services and Metal indices fell around 0.5% each.

Crude Oil Falls

The market decline came despite a favourable backdrop for oil-importing economies such as India.

Brent crude slipped below $79 per barrel and is set for a second consecutive weekly decline, falling more than 9% during the week. The drop followed progress on the US-Iran interim peace agreement, which helped restore shipping through the Strait of Hormuz and eased concerns over supply disruptions.

Kuwait also indicated plans to increase production, adding further pressure on oil prices. Lower crude prices are positive for India as they help reduce inflationary pressures, support the rupee and improve the current account balance.

The rupee strengthened to 94.31 against the US dollar in early trade, extending its recent recovery.

Banking Stocks Show Resilience

While banking shares also witnessed some profit-booking, the sector remained relatively resilient compared to the broader market.

According to Vijayakumar, improving macroeconomic conditions and short covering by foreign investors continue to support banking stocks.

"The significant near-term trends in the market are the underlying strength emanating from improving macros helped by the sharp correction in crude prices and short covering by FIIs supporting recovery in banking stocks. There is room for further upside in the segment, although occasional profit booking can occur," he said.

He added that tapering FII selling and strong domestic institutional buying continue to provide resilience to the market.

Global Markets Mixed

Asian markets remained largely positive. South Korea's Kospi rose 2.82% and Japan's Nikkei 225 gained 0.79%, extending their record runs. Australia's ASX 200 declined 0.89%, while markets in China, Hong Kong and Taiwan remained closed for a holiday.

Investors also kept an eye on Reliance Industries' annual general meeting, where announcements related to the group's new energy business and the potential Jio IPO were expected.

Despite Friday's decline, analysts believe the broader market structure remains constructive, supported by falling crude prices, a stabilising rupee and easing foreign selling pressure, with buy-on-dips likely to remain the preferred strategy in the near term.