Sensex crashes nearly 800 points on bloodbath in IT stocks; Nifty near 17,600

Indian equity indices opened on a gap-down note on Monday amid weak sentiments due to lacklustre fourth-quarter earnings from top two IT firms and rising odds of a US Federal Reserve rate hike in May.
The Nifty IT index fell over 6% in early trade.

The Nifty 50 index fell 191 points or 1.08% to 17,636, while the S&P BSE Sensex dropped 778 points or 1.29% to 59,666, as of 9.30 am.


From the Sensex pack, Infosys and Tech Mahindra were the top losers, falling 7-11%. Wipro, HCL Tech, TCS, HDFC Bank, HDFC and NTPC also opened in the red.

On the other hand, Power Grid, Nestle, IndusInd Bank, Axis Bank, UltraTech Cement and Tata Steel traded with gains.

Shares of Angel One, Just Dial and TV 18 Broadcast surged nearly 2% ahead of Q4 results today.

On the sectoral front, Nifty IT plunged 6.71% and Nifty Financial Services declined 0.28%. Media, metal, healthcare, consumer durables and oil & gas sectors also opened with cuts. In the broader market, Nifty Smallcap50 dropped 0.72% and Nifty Midcap50 declined 0.66%.

"FPI buying and short covering have been driving the current rally. Global market construct has also been positive. This positive market construct is likely to change to a slightly negative construct in the near-term, driven by the correction in IT stocks," V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.

"The worse-than-expected Q4 results from Infosys with only 4-7 % revenue growth for FY24 will drag down IT stocks impacting the Nifty. Sectoral rotation from IT to performing sectors like capital goods, pharma and financials will gather momentum," Vijayakumar added.

Global Markets
Wall Street stocks finished lower on Friday as disappointing US retail sales data offset a lift from better-than-expected bank earnings. The Dow Jones Industrial Average ended down 0.4% at 33,886. The broad-based S&P 500 declined 0.2% to 4,137, while the tech-rich Nasdaq Composite Index shed 0.4% to 12,123.

Asian stocks traded cautiously on Monday as US earnings season gets into full swing, while a raft of Chinese data will offer insight into how the world's second-largest economy is recovering.

Chinese blue chips added 0.7% ahead of data on retail sales, industrial output and gross domestic product due on Tuesday. EUROSTOXX 50 futures edged up 0.3% and FTSE futures 0.2%.

Crude price rises
Brent crude hovered above $86 per barrel on hopes of demand recovery in China, ahead of key macro data on Tuesday. Oil has sustained above the $80 per barrel level since the surprise production cut announcement by OPEC+ earlier this month.

Benchmark US crude rose 7 cents to $82.59 a barrel. Brent crude, the international standard, added 9 cents to $86.40 a barrel.

Rupee Weakens
The Indian rupee fell 5 paise to $81.90 against the US dollar in early trade. The dollar index, which tracks the movement of the greenback against a basket of six major world currencies, rising 0.16% to 101.71 level.

(With inputs from agencies)