Nifty IT slides, recovers from its intraday low; metals see profit booking: What next for markets?

Indian equity benchmarks extended their steep losses on Friday as selling pressure deepened across sectors, with metal stocks emerging as the top laggards due to profit booking, while technology shares closed in the red but rebounded from their intraday lows. The 30-share BSE Sensex pack tumbled 1,048.16 points or 1.25 per cent to close at 82,626.76, while the NSE Nifty50 index tanked 336.10 points or 1.30 per cent to settle at 25,471.10.

Broader markets mirrored the weakness. The Nifty Midcap 100 and Nifty Smallcap 100 declined 1.71 per cent and 1.79 per cent, respectively.

“Indian equities came under significant selling pressure, weighed down by weak global cues and sharp declines in index heavyweights, particularly metals and IT stocks,” said Siddhartha Khemka, Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd (MOFSL).

The Nifty IT index fell sharply during the session before closing 1.44 per cent lower, even as selective buying helped it recover from intraday lows. Despite the late recovery, the sector remains under pressure amid mounting concerns that rapid advancements in artificial intelligence (AI) could disrupt traditional IT services models and impact revenue visibility for Indian firms.

Ajit Mishra – SVP, Research at Religare Broking, said, “Markets traded with a negative bias and remained under pressure for most of the session. Selling was broad-based, with weakness visible in IT, metal, realty and FMCG segments. In addition, the absence of any fresh positive domestic triggers kept the overall mood subdued.”

Vinod Nair, Head of Research at Geojit Investments, said, “Domestic equities ended lower following a highly volatile session, weighed down by weak global cues ahead of the upcoming US inflation data. Sentiment gains from the US–India trade deal have faded as renewed AI-driven disruption fears weigh on risk appetite, with markets worrying that Indian IT firms dependent on labour arbitrage model may face tougher competitive pressure than their Nasdaq peers. This cautious tone extended across the broader market, pulling all major indices into negative territory, with most sectors closing in the red. Metal stocks saw profit-booking amid a stronger dollar index, as reports of Russia’s return to the US-dollar settlement system heightened expectations of potential sanctions relief and raised concerns over weaker realisations for metal companies. Realty stocks declined on the back of weak results and delayed launches.”

Heightened volatility also kept traders on edge, with India VIX climbing back above its 200-day moving average.

Rupak De, Senior Technical Analyst at LKP Securities, said, “The Nifty opened gap-down, reflecting early weakness in IT stocks following negative cues from the US markets. At the end, the Nifty ended the session significantly lower. India VIX also moved back above its 200DMA, indicating rising fear among the market participants. The setup has turned relatively cautious, with the index slipping below its 20DMA for the first time in the past few sessions. Additionally, it has breached the 38.2% Fibonacci retracement of the prior upmove from 24,571 to 26,341. With the index closing below the key support level of 25,500, the near-term bias appears weak, and there is potential for a decline toward the 25,000 mark in the short term. On the upside, immediate resistance is seen around 25,800.”