Indian equity benchmarks began Wednesday’s session in the red zone, mirroring cautious global sentiment and overnight declines in US markets. Concerns surrounding geopolitical tensions in the Middle East overshadowed otherwise supportive earnings trends. This external pressure translated into early losses for domestic indices, with the Sensex dropping 381 points, or 0.48 per cent, to 78,893 at 09:20 am, while the Nifty fell 101 points to 24,475.

Technology shares emerged as the biggest drag in early trade, following weak commentary from key players. The Nifty IT index slipped nearly 3 per cent, led by a sharp fall in HCL Tech, which tumbled over 8 per cent after disappointing earnings signals. The weakness extended to other major IT firms, including Infosys, TCS, and Tech Mahindra, amplifying the downside pressure on benchmark indices.

Another key factor behind the dip was profit booking, as investors chose to lock in gains after a strong three-session rally. The Nifty had advanced more than 200 points in the previous session alone, pushing valuations to elevated levels and prompting caution among traders. Analysts suggest that the current movement reflects a phase of consolidation rather than a sharp reversal.

Market volatility picked up, with India VIX climbing over 3 per cent to 18.13, indicating heightened nervousness among investors. Despite the broader weakness, market breadth remained positive, as 1,654 stocks advanced compared to 921 declines, while 159 remained unchanged—suggesting selective buying interest in pockets of the market.

Crude oil prices, although slightly lower, continued to hover near the $98 per barrel mark, keeping inflation concerns alive. Uncertainty around the Strait of Hormuz and US-Iran developments continues to weigh on sentiment. On the sectoral front, while IT and select financial stocks lagged, FMCG counters such as Nestle and Hindustan Unilever saw buying support.

VK Vijayakumar, Chief Investment Strategist, Geojit Investments, noted, "The market during this highly volatile and uncertain phase is proving the importance of remaining invested. This month, so far, Nifty is up by 10 per cent. The broader market has outperformed with near 15 per cent returns in BSE 500. The uncanny ability of the market to surprise is evident from this. The surprising up moves in the market may happen from technical factors like short covering which was evident yesterday when market rallied despite subdued institutional activity. The declaration of indefinite ceasefire by President Trump and Iran’s indifferent and suspect response to it means the uncertainty will continue. Anything can happen any time."

"Meanwhile, investors can focus on the significant trends in the market. Good results from financials are lending support to the segment. Capital market-related stocks are doing well in response to good results. Power related stocks are doing well. IT, following the weak commentary from HCL Tech yesterday is again likely to go into correction mode. Watch out for the results of autos and auto ancillaries, which are likely to be good," he added.

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