Sensex Plunges 1,100 Points, Nifty Slips Below 23,600 as IT Rally Fizzles; Weak Breadth, Global Uncertainty Drag Markets Lower

Mumbai, May 29:Indian equity benchmarks erased early gains and ended sharply lower on Friday as broad-based selling across sectors outweighed initial optimism from easing crude oil prices and positive global cues. The Sensex plunged nearly 1,100 points, while the Nifty slipped below the 23,600 mark, marking one of the sharpest declines in recent sessions amid weak market breadth and persistent investor caution. At close, the Sensex was down 1.4% at 74,775.7 and the Nifty was down 1.5% at 23,547.7.

Markets had opened on a positive note, tracking strong Asian peers and hopes surrounding a possible extension of the U.S.-Iran ceasefire arrangement. However, sentiment deteriorated sharply through the day as investors turned risk-averse amid geopolitical uncertainty, continued foreign fund outflows and concerns over domestic growth indicators.

The selloff was broad-based, with several heavyweight stocks across financials, auto, defence and consumption sectors witnessing profit booking after recent rallies.

It Stocks Outperform, but Broader Market Weakens

Nifty’s fall was also aided by a weak monsoon forecast stoking fears of inflation. Source: NSE 

Information technology stocks emerged as one of the few bright spots during the session after optimism around artificial intelligence-linked deals and improving global tech sentiment lifted the sector. Wipro gained after announcing an expanded AI-focused partnership with ServiceNow, while peers such as Infosys, TCS and HCLTech also saw buying interest.

Despite the resilience in IT shares, the broader market remained under pressure. Midcap indices traded weak while several momentum-driven retail favourites witnessed volatile moves. Bharat Dynamics dropped sharply after reporting weak quarterly earnings, while Bata India also declined following disappointing results.

Among buzzing stocks, Vodafone Idea reclaimed its position as the most traded stock by volume on the NSE, though the telecom operator ended lower after entering the debate around net neutrality and preferential internet services. Jaiprakash Power Ventures also remained active after its recent rally linked to Adani Power’s stake acquisition deal.

PC Jeweller surged after reporting a sharp rise in quarterly profit, while Ola Electric Mobility extended its recovery rally on hopes of improving operational performance and demand recovery.

Global Cues, Monsoon Worries Weigh on Sentiment

Investor sentiment weakened further after reports highlighted concerns around geopolitical tensions in the Middle East despite ceasefire-related optimism earlier in the session. Traders also remained cautious over uncertainty surrounding energy supply routes and global risk appetite.

The Sensex took a beating as reports highlighted concerns around geopolitical tensions in the Middle East despite ceasefire-related optimism earlier in the session. Source: BSE

Adding to the pressure were concerns around the India Meteorological Department’s forecast of below-normal rainfall this year, which raised fears over rural demand, food inflation and agricultural output. Foreign institutional investor selling also continued to weigh on market sentiment.

Analysts said the sharp correction also reflected profit booking after the market’s recent rebound, with investors turning selective amid elevated valuations and mixed earnings trends.

Going ahead, traders are expected to closely monitor global geopolitical developments, crude oil prices, monsoon progress and institutional flows for further direction. While long-term domestic fundamentals remain supportive, near-term volatility is likely to persist as investors navigate an uncertain global environment.

Source:

• NSE
• BSE