Domestic benchmark indices closed lower on Wednesday, with Sensex declining 492.70 points or 0.63% to 77,235.46 and Nifty falling 132.75 points or 0.55% to 24,154.90. According to latest reports, the Nifty 50 has now fallen for six consecutive sessions, losing around 1.7% during this period. Market weakness was broad-based, with 13 of the 16 major sectors trading in negative territory. The broader mid-cap and small-cap indices also declined around 0.4% and 0.5% respectively, indicating widespread selling pressure across market segments. As per provisional closing data, in the past three trading sessions, the Nifty and Sensex moved lower by 0.99% and 1.08% respectively, while the BSE 150 MidCap Index inched down 0.35% and the BSE 250 SmallCap Index posted modest gains of 0.19%. Market breadth remained fragile with 2,165 shares gaining and 2,961 shares falling on the BSE, while 213 shares remained unchanged.
IT stocks emerged as the worst performers, with Infosys and HCL Technologies falling around 2% and Tata Consultancy Services, Tech Mahindra, and Wipro declining over 1%. According to ICICI Securities, Indian IT services companies are expected to see top-line growth headwinds in the medium-term, stemming from Artificial Intelligence (AI)-led deflation, exacerbated by macro volatility. The brokerage firm noted that AI-led productivity gains are materially compressing turnaround times and easing human effort across service lines, with IT companies even professing 50–60% productivity gains in certain areas over 3–5-years of deal tenure. Gartner data corroborates this trend, with share of IT Services estimated to reduce to 25% in CY26 versus average ~27–28% historically. ICICI Securities has refreshed its demand indicators post Q1FY27 results and continues to see revenue growth headwinds, with revenue growth in FY27 for majority of large-cap IT companies could undershoot that in FY26, and three out of five companies cutting full-year guidance in the June 2026 quarter.
Eternal Ltd was the top traded stock in NIFTY50 index today, recording a quantity of 183.87 lakh shares and recorded a sharp decline of 16.76% compared to last one-week's average daily volume, despite having risen sharply by around 10.96% in last one-month. HDFC Bank Ltd was the second highest traded stock, recording a quantity of 179.17 lakh shares and saw a sharp decline of 21.61% compared to last one-week's average daily volume, having slumped by around 11.05% in last one-month and 27.23% over last one year. Nifty Media index moved higher by 0.40% to 1602.2, with the index having climbed by 2.33% in last one week and posted modest gains of 4.88% over last one month, though it slipped by 3.26% in last one year. Nifty Auto index edged higher by 0.30% to 29264.55, with the index being slightly lower by 1.49% in last one week but having climbed 7.67% over last one month and sharply higher by around 16.12% in last one year. Bank technology spending grew 8% YoY in H1CY26, yet BFSI IT services revenue grew only 4% YoY, continuing to lag client tech budget growth.
Sentiment remained under pressure after US President Donald Trump said on Tuesday that no negotiations were underway with Iran and maintained that the Strait of Hormuz remained open, contradicting Tehran's claim that the key shipping route was closed. As reported by LiveMint, uncertainty over a potential resolution to the nearly six-month-old Middle East conflict pushed Brent crude towards $92 a barrel, raising concerns over inflation and India's import costs. Additionally, rising long-term borrowing costs in the US, Germany and Japan have further reduced the appeal of emerging-market equities, as higher risk-free returns in developed markets could encourage investors to shift capital away from riskier assets.
According to LiveMint analysis by Jay Thakkar, Vice President & Head of Derivatives and Quant Research at ICICI Securities, Nifty 50 has been trending lower since the recent peak made on 3rd August and has reached the lower end of the overall range at 24,000-24,600 levels. The 24,000 strike has the highest put base, hence that is an immediate support, while 24,600 strike has acted as a stiff resistance. ICICI Securities prefers select mid-cap stocks over large caps in the IT sector, with preferences for Mphasis, Coforge and Persistent Systems among midcap IT stocks, which have outpaced peers in improving revenue per employee and gross margins over FY24–TTM June 2026. In the large-cap segment, the brokerage firm picks Tech Mahindra, where revenue growth visibility is supported by sustained, healthy large deal wins. The India VIX has been trading quite lower despite the recent jump in international crude oil prices and 30-year US bond yield above 5.3% levels, indicating that macro data is not particularly bullish, though the results season has been better than expected considering the war situation in Q1 period.
