Indian benchmark indices witnessed a sharp decline on Wednesday, with the BSE Sensex crashing over 600 points to settle at 76,831, down from an intraday high above 77,000. The NSE Nifty50 declined over 190 points to test the crucial 24,000 level at 3:30 PM, slipping below the crucial 24,200 level. At 9:15 AM, the Sensex was trading down close to 400 points, while the Nifty50 started trading around 24,100, bleeding nearly 100 points. The broader markets showed relative resilience despite the benchmark weakness, with the Nifty Midcap 100 edging up 0.12% and the Nifty Smallcap 100 gaining 0.26%. India VIX, the market's fear gauge, rose 3.46% to 13.61, signalling higher volatility ahead.
The market sell-off was primarily driven by private banking stocks following mixed quarterly earnings results. Axis Bank slumped 5.45%, while HDFC Bank fell 4.64%, emerging as the top losers on the Nifty. Kotak Mahindra Bank also declined 2.85%, weighing heavily on the benchmark indices. Other notable laggards included InterGlobe Aviation (IndiGo) down 1.63%, followed by Maruti Suzuki (-1.34%), Bajaj Finance (-0.77%), Mahindra & Mahindra (-0.75%), Bharat Electronics (BEL) (-0.61%), and Hindustan Unilever (-0.55%). On the gaining side, Trent rose 2.4%, followed by NTPC (1.18%), Bharti Airtel (1.14%), Tech Mahindra (1%), Reliance Industries (0.61%), and HCLTech (0.52%).
Sectorally, financial stocks bore the brunt of the selling, with the Nifty Private Bank index dropping 2.73% and the Nifty Financial Services index falling 1.45%. The Nifty Auto and Nifty Realty indices also traded lower. In contrast, defensive and commodity-linked sectors outperformed significantly. The Nifty Media index gained 1.51%, followed by the Nifty PSU Bank (0.85%), Nifty Pharma (0.65%), Nifty Oil & Gas (0.62%), Nifty Metal (0.61%), and Nifty Healthcare (0.58%). The Nifty IT index was marginally higher, extending Friday's earnings-led rally.
Global markets signalled a cautious session ahead, as investors awaited key US corporate earnings amid worsening geopolitical concerns. Asian markets traded sharply higher on Wednesday, with Japan's Nikkei 225 rising 1.93% and South Korea's Kospi surging 6.01% in early trade. US markets also closed in positive territory overnight, with the Dow Jones Industrial Average gaining 0.74%, the S&P 500 advancing 0.89%, and the Nasdaq Composite climbing 1.29%, supported by optimism over corporate earnings. According to VK Vijayakumar, Chief Investment Strategist at Geojit Investments, the strongest headwind is Brent crude spiking above $90 amid escalating tensions between the US and Iran. He noted that the unwinding of AI-driven trades in markets such as the US, South Korea, and Taiwan could redirect foreign portfolio flows towards India. Ponmudi R, CEO of Enrich Money, said the first-quarter earnings season is likely to dictate the market's near-term direction, with investors focusing on company-specific opportunities rather than broad-based movements.
Corporate earnings are expected to remain a key trigger for markets during the session, with several companies set to announce their June quarter (Q1 FY27) results. The companies scheduled to report earnings include Adani Green Energy, Adani Power, Bharat Petroleum Corporation (BPCL), Dr Reddy's Laboratories, Hindustan Petroleum Corporation (HPCL), IndusInd Bank, JSW Energy, Nestlé India, Tata Communications, UCO Bank, United Spirits and UTI Asset Management Company. Investors will closely track the results for management commentary on demand trends, margins and the outlook for the remainder of FY27. Pharma stocks declined more than 1% as investors reacted to the possibility of fresh tariffs on generic drugs imported into the United States, with US President Donald Trump announcing that these drugs would attract no tax for the first two years, followed by a 100% tariff in the first year and a 200% tariff thereafter.
