A sharp selloff in information technology (IT) stocks, coupled with a spike in crude oil prices, snapped the benchmark indices’three-day winning streak on Wednesday, as rising geopolitical tensions in West Asia dented investor sentiment.
The Sensex declined 757 points, or 0.95 per cent, to close at 78,516, while the Nifty 50 fell 199 points, or 0.81 per cent, to settle at 24,378. The indices had ended at their highest levels since March 3 in the previous session after a three-day rally driven by optimism around a potential US–Iran ceasefire.
Tech stocks led the decline, with the Nifty IT index dropping nearly 4 per cent. HCL Technologies slumped about 11 per cent—its worst fall in over a decade—after issuing weaker-than-expected annual guidance. The outlook also dragged peers such as Infosys and Tata Consultancy Services lower.
Market participants cited a combination of global uncertainty and earnings disappointment for the sharp correction.
“Higher oil prices, continued geopolitical tensions between the US and Iran, and persistent foreign fund outflows have kept volatility elevated,” said Vikram Kasat, head of advisory at PL Capital.
Crude oil prices briefly surged past $100 per barrel amid concerns over supply disruptions, before easing slightly to hover near $98.
“With Brent crude stubbornly hovering near $100, for an import-dependent economy like India, these prices act as a direct tax, weakening the rupee and fuelling inflationary fears. Consequently, any fresh ‘war headlines’ or a further breakdown in negotiations will likely trigger immediate and high-magnitude volatility,” said Mayank Jain, market analyst, Share.Market.
Analysts said the trajectory of oil prices and developments in the US–Iran conflict would remain key near-term triggers for the market.
Siddhartha Khemka, vice president and head of retail research, Motilal Oswal Financial Services, said the selloff was also exacerbated by profit-booking after the recent rally. He noted that the IT sector faces multiple headwinds, including cautious discretionary spending, delays in deal closures amid US uncertainty, and pricing pressures from increasing adoption of artificial intelligence.
Volatility remained elevated, with the India VIX rising over 4 per cent, reflecting investor caution.
Both foreign portfolio investors (FPIs) and domestic institutional investors (DIIs) turned net sellers on Wednesday, booking profits after a sharp 12 per cent rebound this month. FPIs offloaded shares worth Rs 2,078 crore, while DIIs sold equities worth Rs 1,048 crore.
Despite the weakness in benchmark indices, the broader market showed resilience. The Nifty Midcap 100 index edged up 0.2 per cent, while the Smallcap 100 index gained 1.1 per cent.
Index heavyweights HDFC Bank and ICICI Bank fell 1.5 per cent each, weighing on market performance. Gains in Reliance Industries and Hindustan Unilever (HUL) cushioned the market fall. HUL gained nearly 3 per cent after strong Nestlé’s performance in the March quarter.
“Markets are likely to remain range-bound in the near term amid geopolitical uncertainty and oil price volatility, though stock-specific action driven by the ongoing Q4 earnings season could offer selective support,” Kasat added.
