Closing bell: Sensex slumps 346 pts, Nifty settles at 25,355; IT stocks fall ahead of TCS Q1 results

The Indian equity benchmarks extended their decline for the second consecutive session on Thursday, pressured by weakness in IT stocks ahead of the Q1FY26 results of bellwether Tata Consultancy Services (TCS). Market sentiment remained cautious due to concerns over U.S. President Donald Trump’s evolving tariff policies and expectations of a muted start to the earnings season for the IT and financial sectors.

The BSE Sensex ended the session at 83,190.28, down by 345.8 points or 0.41%, while the NSE Nifty50 settled 120.85 points lower at 25,355.25, a decline of 0.47%.

In the broader markets, the Nifty MidCap 100 fell 0.32%, while the Nifty SmallCap index dropped 0.3%.

“The mid- and small-caps had limited negative action, reflecting a wait-and-watch approach amid rising expectations of a better earnings outlook compared to large-caps,” said Vinod Nair, Head of Research, Geojit Investments.  

On the sectoral front, Nifty PSU Bank and Nifty IT were the top underperformers, both shedding 0.8%. Selling in IT stocks persisted as investors awaited the quarterly results of TCS. The country’s largest software exporter is set to announce its Q1FY26 results post-market hours today. Other key sectors, including Auto, Banking, Energy, Financial Services, FMCG, Pharma, Healthcare, and Oil & Gas, also ended in negative territory. On the other hand, Nifty Metal, Realty, and Consumer Durables settled with marginal gains.

On the other hand, Nifty Metal, Realty and Consumer Durables closed higher.

"Investor sentiment remains cautious ahead of the Q1 results in anticipation of a muted start to the season from the IT and finance sectors. However, the recent consolidation in the IT stocks largely factors in the muted outlook, limiting further worries,” Nair added.

Out of the 30 Sensex constituents, 24 stocks closed in the red. The top losers included Bharti Airtel , Asian Paints , Infosys , Bharat Electronics , and Tech Mahindra, falling by up to 2.6%. Ahead of the Q1 results, TCS ended marginally lower.

On the flip side, Maruti Suzuki , Tata Steel , Bajaj Finance , Bajaj Finserv , Trent , and Tata Motors closed in positive terrain, rising by up to 1.36%.  

Meanwhile, the India VIX, which gauges market volatility, dropped by 2.24% to close at 11.6 points.

Ajit Mishra, SVP-Research, Religare Broking, said that the markets will react to TCS’s earnings in early trade tomorrow, with a keen eye on the management commentary, which could set the initial tone.

“With the Nifty now hovering near its immediate and crucial support zone—marked by the 20-day exponential moving average (20-DEMA) and the upper boundary of its previous consolidation range around the 25,200–25,300 zone—it will be critical for the index to hold this level to maintain its positive bias,” he said.

As the earnings season is underway, stock-specific opportunities are likely to emerge on both sides, so participants should align their positions accordingly, Mishra added.

Technically, the Nifty slipped lower following a breakdown from the congestion zone on the daily chart, reinforcing the prevailing bearish sentiment, said Rupak De, Senior Technical Analyst at LKP Securities.

“In the short term, the trend is likely to remain weak, which could lead to further downside. On the lower end, support is placed at 25,250–25,200, while on the higher end, resistance levels are seen at 25,400 and 25,500," De said.

Shrikant Chouhan, Head-Equity Research, Kotak Securities, said that the intraday market outlook is weak for the Nifty and the Sensex; however, a fresh sell-off is possible only after the dismissal of 25,300 and 83,000, respectively. “Below these levels, the market could slip to 25,200/82,700. Further selling pressure may continue, potentially dragging the market down to 25,225/82,500.”

“On the upside, above 25,450/83,400, we could see a quick intraday rally toward 25,550–25,650/83,700–84,000,” he added.

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