Indian benchmark indices closed lower on Thursday, dragged down by losses in IT stocks following weak earnings and cautious global cues. Optimism over a potential free-trade agreement with Britain failed to lift market mood.
The Sensex plunged over 680 points in early trade, while the Nifty50 slipped below the 25,050 mark. By the close, the BSE Sensex had lost 542 points, or 0.71%, to settle at 82,184, and the Nifty50 declined 158 points, or 0.63%, to 25,062.
The total market capitalisation of BSE-listed firms fell by Rs 2.3 lakh crore to Rs 458.05 lakh crore.
The Nifty IT index led sectoral losses with a 2.2% drop, followed by declines in realty, FMCG, financial services, and private banks, which slipped between 0.5% and 1.1%. Broader markets also remained weak, with the Nifty Midcap100 and Smallcap100 falling 0.6% and 1.1%, respectively.
Here are three key reasons behind the fall:1) IT stocks lead the fall after disappointing Q1 resultsThe Nifty IT index saw the steepest drop, down 2.2%, with stocks like Coforge and Persistent Systems plunging 9% and 8%, respectively. Infosys also shed 1.4% after its Q1 earnings failed to impress.
Live EventsCoforge reported an EBIT margin of 12.7%, falling short of expectations and contracting from the previous quarter. The company posted negative free cash flow and spent $85 million on capex, including $62 million to build an AI data centre, shifting its model from asset-light to asset-heavy.
Persistent Systems, meanwhile, missed growth targets and deferred wage hikes by a quarter. Deal wins were flat at $520 million versus $517.5 million in the previous quarter, raising concerns about demand momentum.
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2) Trump’s surprise Fed visit spooks global marketsInvestor sentiment was also dented by global cues after the White House announced that U.S. President Donald Trump will visit the Federal Reserve on Thursday — an unexpected development that escalates tensions with Fed Chair Jerome Powell.
The U.S. central bank is expected to hold rates steady in its upcoming meeting, but political overhang added to market unease.
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3) Uncertainty around U.S.-India trade dealHopes of an interim trade deal between India and the United States before Washington’s August 1 deadline have dimmed. Talks remain stalled over tariff cuts on key agricultural and dairy products, according to two Indian government sources.
In April, President Trump had threatened to impose a 26% tariff on Indian imports but paused it to allow negotiations. That pause ends on August 1, and India has yet to receive a formal tariff letter — unlike over 20 other countries.
India’s trade delegation, led by chief negotiator Rajesh Agrawal, returned from a fifth round of talks in Washington without a breakthrough.
“An interim deal before August 1 looks difficult, though virtual discussions are ongoing,” one of the sources told Reuters. A U.S. delegation is expected to visit New Delhi soon to continue negotiations.
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