Indian benchmark indices declined sharply on Thursday, dragged down by losses in IT stocks amid weak earnings and subdued global sentiment. Optimism over a potential free-trade agreement with Britain failed to lift market mood.
In early trade, the Sensex plunged over 680 points intraday, while the Nifty50 slipped below the 25,050 mark. At 1:08 pm, the BSE Sensex was down 589 points, or 0.71%, at 82,142, while the Nifty50 dropped 166 points, or 0.65%, to 25,056.
The total market capitalisation of BSE-listed firms fell by Rs 2.42 lakh crore to Rs 457.93 lakh crore.
The Nifty IT index fell 2%, leading sectoral losses, followed by declines in realty, FMCG, financial services, and PSU banks — down between 0.5% and 1.2%. Broader indices also weakened, with the Nifty Midcap100 and Smallcap100 down 0.5% and 0.86%, 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%, with stocks like Coforge and Persistent Systems plunging 9% and 8%, respectively. Infosys also shed over 1% after its Q1 earnings failed to impress.
Live Events
Coforge 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.Also Read: Is the IPO market the new gold? 2025 listings outshine Nifty with 4X returns
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.
Also Read: Can Swiggy ride the sentiment wave after Eternal’s blowout quarter?
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.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)