Sensex tanks 900 pts, Nifty slips below 24K: Why stock market is down today

Stock indices Sensex and Nifty fell on Friday, extending their fall to the third day, amid risk-off trade due to concerns over tensions in West Asia and its impact on inflation and growth globally. Oil prices topped $106 a barrel, rupee weakened and foreign flows continued, with a couple of brokerages such as HSBC and JPMorgan also downgrading India, citing better opportunities elsewhere. Add to the concerns were a weak FY27 guidance by Infosys and other IT majors. The social media posts by the US President Donald Trump further weighed in on the fragile sentiment. The BSE Sensex stood at 76,843.61, down 820.39 points, or 1.06 per cent. The index hit a low of 76,758.07 so far, down 905 points. Nifty was trading at 23,942.55, down 230.50 points, or 0.95 per cent.

IT stocks drag
Infosys Ltd FY27 guidance to calm investors. Infosys shares fell 5 per cent  after the second-largest IT player set its FY27 revenue growth guidance at 1.5-3.5 per cent in constant currency (CC) terms. This comes as FY27 guidance by HCL Technologies and Q1 outlook by Wipro also failed to meet Street expectations, raising fears that AI-led deflation has begun to bite and is increasing pressure on the existing book of business. HCL Tech had guided for 1–4 per cent revenue growth in FY27, following which its shares had plunged 11 per cent in the very next day. IT stocks such as HCL Tech, TCS and Infosys alone contributed to 300-point negatively to Sensex’s movement today. 

Trump speaks
The US President in a post said: “I have all the time in the world, but Iran doesn’t — the clock is ticking.” In another post on Truth Social, he claimed that the US has total control over the Strait of Hormuz. No ship can enter or leave without the approval of the United States Navy, he said. 

Also, in a post, the US President said he has ordered the United States Navy to shoot and kill any boat, small boats though they may be, that is putting mines in the waters of the Strait of Hormuz.

Oil prices, FPI outflows

This triggered further jump in oil prices  Alreadt, Brent crude is up 18 per cent this week and last quoted at $106 a barrel level. Another negative trend from the market perspective is that FPIs have again turned sellers this week after buying for three days last week. This, along with the spike in crude, has again dragged the rupee down to 94.11 level,” said VK Vijayakumar at Chief Investment Strategist, Geojit Investments. If this trend of FPI selling continues, large caps will continue to be weak, he warned.

Foreign brokerages cut ratings
Foreign brokerages JPMorgan and HSBC downgraded Indian equities, stating that domestic stocks appeared less attractive compared with peers. JPMorgan lowered India’s rating to ‘Neutral’ from ‘Overweight’. HSBC said it would fund its Korea upgrade by downgrading India to ‘Underweight’ from ‘Neutral’, citing potential inflation and demand pressures that are likely to weigh on earnings growth.

This foreign brokerage added that foreign investor sentiment is expected to remain cautious on India amid weakening growth and forex pressure. It warned that although valuations have corrected materially from their peak, they could rise again as earnings cuts come through.