Sensex drops 500 pts, Nifty below 25,200 as IT stocks drag

Stock Market Today: Benchmark equity indices fell sharply as investors resorted to profit booking following the uptrend seen earlier this week. IT stocks were among the biggest drags as earnings for the first quarter of financial year 2025-2026 (Q1FY26) failed to uplift the overall sector outlook.

 

At 11:45 AM, BSE Sensex was trading at 82,300.08 level, down by 423 points or 0.51 per cent. The 30-scrip index logged an intraday low of 82,047.22. So far this week, the index has risen over 450 points.  Meanwhile, NSE Nifty was trading at 25,097.85, 122 points or 0.48 per cent. The index hit an intraday low of 25,018.70. It has gained over 170 per cent this week.

 

 

From the Sensex pack, majority stocks were trading in red with Trent, Tech Mahindra, Reliance, Infosys, and Bajaj Finance among the top losers. On the flip side, Eternal (formerly Zomato), Tata Motors, Sun Pharma, Tata Steel and Titan were among the top gainers.

 

Even broader markets failed to trade in the green territory. The Nifty midcap 100 was trading at 58,954.15, down by 0.60 per cent.  Nifty smallcap 100 followed suit and was trading 0.83 per cent lower, quoting 18,735.95. Sectorally, Nifty Pharma was among the top-performing indices, up by 0.63 per cent, quoting 22,559.15. Nifty Auto was also trading in green, up by 0.19 per cent, trading at 24,125.80. On the other hand, Nifty IT was down by over 2 per cent, trading at 36,138 level.

Here's why markets are trading lower today:

IT stocks drag

IT stocks continued to witness selling pressure as industry giants failed to impress investors during the earnings season. Infosys shares dropped over 1 per cent despite releasing upbeat results. Even midcap IT firms failed to lift the sector mood. Shares of Persistent Systems were trading at ₹5,177.50, down by 7.66 per cent. Shares of Coforge witnessed an even steeper fall, down by over 8 per cent, quoting ₹1,689. The Nifty IT index hit an intraday low of 36,118 level.

FII selloff

Foreign institutional investors (FIIs) extended their selling streak in July after being net buyers for three consecutive months. Prevailing uncertainties on the macro front, owing to trade deals and the ongoing earnings season, have contributed to the cautious sentiment. That apart, the current valuations of the Indian stock market might have also added to the overall jitters.  According to D-Street analysts, the current valuations of Indian markets remain elevated compared to global peers, which is likely pushing back foreign investor interest. Interestingly, the primary market showed a contrasting trend, attracting strong participation despite the broader market pullback.

 

"FIIs have turned consistent sellers in the cash market even while continuing to invest through the primary market route. The principal reason for FII selling is the high valuations in India and relatively cheaper valuations in other markets," said VK Vijayakumar, chief investment strategist of Geojit Investments.

 

India-US trade deal in limbo

So far this week, the D-street sentiment remained largely bullish. Even in the previous trading session, markets finished with high gains. BSE Sensex was up by nearly 540 points or 0.66 per cent, whereas NSE Nifty surged by 159 points or 0.63 per cent. The optimism mainly came on the back of rising anticipations of India striking a trade deal with the US, following Japan's 'massive' trade agreement with Washington.  

However, concrete developments are yet to come in ahead of the August 1 tariff deadline, keeping the market mood cautiously optimistic.

Nifty expiry

While expiry-related volatility played a role in dragging the index below the 25,100 mark, the broader sell-off was fueled by a mix of domestic and global factors. Concerns around global economic cues, earnings season developments and valuation pressures added to investor caution, leading to a sharp pullback after recent gains.