Sensex settles 300 pts lower, Nifty below 26,300: Selling in IT shares among key factors behind market decline

Stock market today: Sensex, Nifty declined amid profit booking.

The benchmark equity indices Sensex and Nifty settled lower on Monday, dragged down by selling pressure in information technology stocks.

The Sensex dropped 322.39 points or 0.38 percent to settle at 85,439.62. During the day, it tanked 446.68 points or 0.52 percent to 85,315.33.

After hitting a record intra-day high of 26,373.20, the Nifty failed to carry forward the momentum and declined 78.25 points or 0.3 percent to end at 26,250.30.

HCL Technologies, Infosys and HDFC Bank were among the top laggards in the Nifty50 pack, declining up to 2 percent, while Bharat Electronics and Nestle India were among the top gainers, rising up to 3 percent.

Key factors behind market decline

1) Selling in IT shares: The Nifty IT index declined about 2 percent, with all its 10 constituents trading in the red. Shares of Wipro, HCL Tech and Infosys fell up to 3 percent. Concerns over potential additional US tariffs offset positive business updates and expectations of better quarterly earnings. Addtionally, the brokerage CLSA issued a cautious note on IT, advising investors to reduce their positions as the upcoming Q3 FY26 earnings are expected to be soft.

2) Trump threatens tariff hike: US President Donald Trump on Sunday said Prime Minister Narendra Modi “knew he was not happy” with India’s purchases of Russian oil and that Washington could raise tariffs on New Delhi “very quickly”. He made the remarks while speaking to reporters aboard Air Force One on his way from Florida to Washington DC. Market participants said such comments added to uncertainty and led to a cautious approach among investors.

"The year 2026 has begun with major geopolitical developments which can have profound consequences. The US action in Venezuela has the potential to further destabilise global geopolitics," V K Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd, said.

Trump threatens tariff hike on India

3) Rupee declines: The rupee weakened by 4 paise to 90.24 against the US dollar in early trade. At the interbank foreign exchange market, the domestic unit opened at 90.21 and slipped further amid geopolitical uncertainties and demand for the American currency.

According to forex traders, the rupee is expected to remain under pressure due to global developments, even as lower crude oil prices may provide some support.

Technical Analysis

Anand James, Chief Market Strategist at Geojit Investments Ltd, said a strong close on Friday near the upper Bollinger band suggested a continuation of upside momentum. However, he cautioned that a high VIX level indicates the possibility of increased volatility. He said the Nifty is expected to face resistance around 26,380 and 26,450–26,550 levels, while the immediate support is seen near 26,288.

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