Indian equity markets ended lower on Wednesday, snapping a one-day recovery, as heavy selling in IT stocks and a sharp spike in crude oil prices weighed on benchmark indices. The Sensex closed 303.67 points, or 0.41%, lower at 74,346.17, while the Nifty fell 77.95 points, or 0.33%, to 23,405.60. A late Cabinet decision on aviation fuel, however, provided a shot in the arm for aviation stocks just before the close.

IT stocks unwind after three-session rally

Technology stocks were the defining story of the day, and the move was as sharp as the rally that preceded it. The Nifty IT index slumped 5.57% on Wednesday, reversing gains accumulated over the previous three sessions, in which it had risen 4.23%, 2.66% and 0.60% respectively.

The selloff was broad across the sector. TCS tumbled 8.43%, Tech Mahindra fell 6.23%, HCL Tech dropped 5.25% and Infosys declined 3.82%. ITC, Eternal, Larsen & Toubro and Bajaj Finance were also among the laggards in the Sensex pack.

Analysts said the move was a case of sharp profit-taking after a quick run-up. "After a strong three-day rally, the sector witnessed intense profit booking as investors reassessed global technology growth expectations," said Hariprasad K, Research Analyst and founder, Livelong Wealth.

Crude oil and foreign outflows compound the pressure

Brent crude jumped 3% to $98.92 per barrel, adding a macro layer to what was already a nervous session. For India, higher crude is a double-edged problem: it widens the current account deficit and stokes inflation, both of which weigh on risk assets.

The session was highly volatile. The Sensex sank as much as 1,157.24 points intraday to 73,492.60 before recovering sharply into the close, a swing that underscores how unsettled the market remains.

Cabinet's ATF fund lifts aviation; InterGlobe a gainer

In a development that gave markets a late-afternoon reprieve, the Union Cabinet approved a ₹10,000 crore ATF Price Stabilisation Fund to protect airlines from the surge in aviation turbine fuel prices triggered by the West Asia crisis.

ATF prices have risen from ₹60.5 per litre in March 2026 to over ₹142 per litre in May 2026, a 2.5-fold jump in roughly two months, according to the government. The Cabinet has now capped ATF for domestic operations at ₹75.6 per litre.

The fund will be channelled through interest-free advances to Oil Marketing Companies, which will be compensated whenever international ATF prices remain significantly above a prescribed benchmark. The support is available to all scheduled Indian carriers for both domestic and international operations, and the scheme runs for up to 36 months, subject to annual review.

The announcement came just before the market close, and InterGlobe Aviation — the IndiGo parent — was among the gainers in the Sensex pack for the day. Aviation stocks had been under sustained pressure for months as fuel costs ballooned amid the West Asia conflict and the Pakistan airspace closure disrupted international routing. Shares of SpiceJet jumped nearly 5% post the announcement to an intraday high of ₹12.79 apiece on the NSE, before finally settling at ₹12.42.

In Asia, Japan's Nikkei 225 and China's Shanghai Composite ended higher, while Hong Kong's Hang Seng settled lower. European markets traded mostly in the red. Separately, the US Trade Representative proposed 12.5% additional duties on 54 countries including India over forced labour import compliance, which added another overhang to global trade sentiment.