Tech stocks drag Indian indices lower following weak HCLTech guidance.

Bearish sentiment gripped Dalal Street on Wednesday as the BSE Sensex plummeted over 550 points, erasing previous gains. This sharp decline pushed the Nifty50 below the psychological 24,450 mark during early trading hours. Panic selling erupted primarily within the Information Technology sector, which saw nearly Rs 92,000 crore in market value vanish in a single session.

HCLTech acted as the primary catalyst for this downturn. After reporting fourth-quarter results that fell short of expectations, the firm issued a cautious revenue growth forecast of just 1% to 4% for the 2027 fiscal year. This conservative outlook triggered a wave of broker downgrades, leading HCLTech shares to crash by 11%. The contagion spread quickly to other industry leaders, with Tech Mahindra and Infosys also recording significant losses.

Weak international signals further pressured domestic equities. Despite recent reports of a ceasefire extension between the US and Iran, investors remain cautious about global growth stability. Interestingly, while foreign institutional investors (FIIs) have been net sellers for 27 consecutive sessions, domestic institutional investors (DIIs) continue to provide a cushion, absorbing much of the selling pressure to prevent a total collapse.

IT Sector Facing Headwinds

The software services index became the worst-performing sector, reflecting deep-seated worries about discretionary spending in Western markets. Beyond HCLTech, Persistent Systems and Coforge faced selling heat. Analysts suggest that until the sector provides more robust guidance, volatility will likely persist.

Technical experts point to the 24,550 - 24,650 zone as a major resistance level for the Nifty. Failure to maintain these levels could lead the index toward the 24,200 support floor. Meanwhile, the India VIX cooled slightly, suggesting that while prices are falling, the extreme fear seen in previous months is beginning to stabilize.

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