Sensex, Nifty snap 5-day winning streak as IT stocks slump on Accenture outlook

Indian equity markets opened sharply lower on Friday, bringing an end to a five-session rally, as heavy selling in information technology stocks weighed on investor sentiment following a reduction in revenue growth guidance by global consulting and technology services firm Accenture.

The benchmark BSE Sensex plunged 786.58 points in early trade to 76,624.90, while the NSE Nifty fell 210.95 points to 23,959.80. The decline was led by technology stocks, which came under intense pressure amid concerns that a weaker global demand environment could affect earnings prospects for Indian IT companies.

Among the biggest losers on the Sensex, Infosys dropped more than 8 per cent, while Tata Consultancy Services fell around 6 per cent. Tech Mahindra declined about 5 per cent and HCL Technologies lost nearly 5 per cent. HDFC Bank and Tata Steel also traded lower, adding to the market's weakness.

The broader technology sector reflected the negative sentiment, with the BSE IT index falling more than 5 per cent in early trading. Market participants linked the sell-off to Accenture's weaker growth outlook, which renewed concerns about demand conditions and earnings prospects across the global technology services sector.

According to V.K. Vijayakumar, chief investment strategist at Geojit Investments Limited, the guidance cut had triggered a sharp decline in the American Depositary Receipts (ADRs) of major Indian IT companies, leading to a negative spillover effect in domestic markets.

Despite the broader weakness, a few stocks bucked the trend. NTPC, Bharti Airtel, Trent and Power Grid Corporation traded in positive territory, providing limited support to the indices.

Global cues offered a mixed picture. Asian markets were largely steady, with Japan's Nikkei 225 and South Korea's Kospi posting marginal gains. Wall Street had also ended higher overnight, suggesting that the pressure on Indian markets was primarily sector specific.

Meanwhile, Brent crude, the international oil benchmark, eased nearly 1 per cent to trade around USD 79 per barrel, offering some relief on the inflation front.

Investor sentiment was also influenced by continued foreign fund outflows. Foreign institutional investors were net sellers of Indian equities worth Rs 1,025.20 crore on Thursday, according to exchange data.

The sharp decline comes a day after benchmark indices extended their winning streak for a fifth consecutive session. On Thursday, the Sensex had gained 254.36 points to close at 77,409.98, while the Nifty rose 82.30 points to settle at 24,168.

Market participants will now closely monitor developments in the global technology sector, corporate earnings expectations and foreign investment trends for further direction.

With PTI inputs