Markets witnessed sharp profit-booking on Thursday, with benchmark indices reversing early gains to close significantly lower as disappointing quarterly earnings from IT majors triggered a sector-wide selloff that overshadowed positive manufacturing PMI data and global cues.

The Sensex plunged 542.47 points or 0.66 per cent to close at 82,184.17, while the Nifty fell 157.80 points or 0.63 per cent to settle at 25,062.10. The decline came despite the indices opening on a strong note, with the Nifty touching a high of 25,246 in early trade before sliding to an intraday low of 25,018.

Sector slide

The IT sector bore the brunt of selling pressure, with the Nifty IT index tumbling over 2 per cent following lacklustre Q1 FY26 results from major technology companies. Among individual stocks, CϙForge crashed 9 per cent, Persistent Systems declined 8 per cent, while Infosys dropped 1 per cent, weighing heavily on the broader market sentiment.

“Indian equities fell sharply today, reversing previous gains despite positive global cues. Initial optimism around the India-UK free trade agreement gave way to caution as attention shifted firmly to earnings. The IT and FMCG sectors dragged down large-cap stocks due to subdued Q1 performance,” said Vinod Nair, Head of Research at Geojit Investments Ltd.

Sectoral performance remained mixed throughout the session. While PSU banks, healthcare, and pharma stocks outperformed with the PSU Bank index rallying over 1.40 per cent, sectors including construction, consumer goods, energy, and oil & gas lagged . The Nifty Realty index also came under pressure and closed among the top sectoral losers.

Market breadth was decidedly negative, with 2,467 stocks declining against 1,523 advances on the BSE. In the Nifty 500 universe, as many as 326 stocks ended in the red, reflecting broad-based weakness across segments. The broader indices also witnessed selling pressure, with the Nifty Midcap 100 declining 0.58 per cent and the Smallcap 100 underperforming significantly by tumbling 1.09 per cent.

“Today, the benchmark indices experienced profit booking at higher levels. Among sectors, the IT index lost the most, correcting 2.20 per cent, whereas despite weak market sentiment, the PSU Bank index rallied over 1.40 per cent,” noted Shrikant Chouhan, Head Equity Research at Kotak Securities.

Gainers and losers

Among individual Nifty 50 stocks, Eternal emerged as the top gainer, surging 3.44 per cent to close at ₹312.45, followed by Dr. Reddy’s Laboratories, which gained 1.72 per cent to ₹1,268.90. Tata Motors advanced 1.62 per cent to ₹701.30, while Tata Consumer Products rose 0.98 per cent to ₹1,073.00 and Cipla gained 0.87 per cent to ₹1,486.30.

On the losing side, Nestle India led the decline, plummeting 5.57 per cent to ₹2,316.00, while Trent fell 3.94 per cent to ₹5,148.00. Tech Mahindra dropped 3.26 per cent to ₹1,496.20, Shriram Finance declined 3.17 per cent to ₹633.30, and Reliance Industries slipped 1.53 per cent to ₹1,402.80.

The macroeconomic backdrop remained supportive with robust manufacturing activity data. “The latest data revealed robust manufacturing activity—the HSBC India Manufacturing PMI rose to 59.2 in July 2025 from 58.4 in June—while the Services PMI eased to 59.4 from 60.4, reflecting a modest deceleration in services growth,” according to Ashika Institutional Equities.

Rupee retreats

Currency markets saw mixed action as the rupee opened strongly with 0.30 per cent gains but gave up those gains during the session. “Rupee opened strongly with 0.30 per cent gains supported by a weaker dollar index near 97.30 in early trade. However, as the dollar index began to recover intraday, the rupee gave up its gains and settled near 86.40 from the day’s high of 86.25,” said Jateen Trivedi, VP Research Analyst at LKP Securities.

Gold prices declined amid reduced safe-haven demand following fresh trade deal announcements. “Gold traded weak as trade deals between the US and Japan, and potential agreements with the EU, weighed on safe-haven demand. Comex gold has declined by around $60 since yesterday, while MCX gold dropped nearly ₹1,500 to ₹98,600,” Trivedi added.

Technical analysts highlighted key resistance and support levels for the market. “The Nifty slipped lower as it faced stiff resistance around the 25,250–25,260 zone. On the downside, support remains intact at 24,900; a decisive break below this level could trigger a correction in the market,” said Rupak De, Senior Technical Analyst at LKP Securities.

“Though the Q1 earnings are broadly in line, it does not justify the premium valuation; India is trading at a 3-year high of 21x P/E,” Nair cautioned, highlighting valuation concerns amid the earnings season.

Looking ahead, market participants remain cautious with focus shifting to next week’s U.S. Federal Reserve policy decision and ongoing earnings announcements. “Market participants remain cautious ahead of next week’s U.S. Federal Reserve policy decision, which is expected to provide further direction,” Trivedi noted, suggesting continued volatility in the near term as global monetary policy cues and domestic earnings developments continue to drive market sentiment.

Published on July 24, 2025