Sensex Slumps 500 Points as IT, Banks Weigh on Markets; Infosys, Tech Mahindra Drag

Midcaps and Smallcaps stumble too as Q1 earnings dampen investor mood

Indian markets had a rough morning on Thursday, with the Sensex sliding over 500 points by noon as nervous investors reacted to a string of lukewarm June quarter results. IT stocks, banking counters, and FMCG heavyweights took a hit, while even midcaps and smallcaps couldn’t escape the sell-off.

The broader sentiment? Shaky. Despite a decent start, things turned south quickly, especially after Infosys and Coforge failed to excite despite better-than-expected earnings. It’s the kind of day where even a mild disappointment seems to trigger a sell button.

Infosys Beats Street, But Still Falls Flat

Infosys posted results that—on paper—should’ve cheered the market. A 3.3% rise in quarterly revenue. A ₹6,921 crore net profit. Both beat Bloomberg estimates. But the stock still slipped.

Investors didn’t just want numbers. They wanted conviction.

And frankly, the outlook just wasn’t bold enough to satisfy. The stock was down around 1% in afternoon trade, having dipped even further intraday.

In contrast, Persistent Systems and Coforge took harder hits, slumping up to 6% despite releasing their own quarterly earnings. Seems like even marginal weakness in the IT sector is sparking strong reactions.

TCS, LTIMindtree, and Mphasis were no better off either.

One sentence says it all: sentiment is fragile.

Banks and FMCG Join the Slide

It wasn’t just tech stocks bearing the brunt.

Private banks and FMCG names were quietly bleeding. SBI, HUL, and Bajaj Finance were among the worst hit in the Nifty 50 pack. Traders watching the F&O expiry today were quick to pull out of risk-heavy positions.

In fact, the Nifty Private Bank index was down significantly through the morning, pulling the broader Nifty 50 index down by more than 150 points.

Here are some notable laggards as of noon:

• SBI down nearly 2%

• Asian Paints losing over 1.5%

• Bajaj Finance struggling, down nearly 1.8%

• Tech Mahindra and Infosys both in the red

• Reliance Industries also trading lower

These are not fringe players. When the giants sink, the rest follow.

Pockets of Green: Zomato, Sun Pharma, BEML Shine

Not everything was gloom and doom though.

Zomato—now rebranded under Eternal—led the gainers list, bolstered by positive expectations ahead of its results. Tata Motors, Sun Pharma, and Titan also managed to stay above water.

BEML had its moment too.

Shares of the construction and defense equipment maker surged 3.2% after it clinched a ₹294 crore order from the Ministry of Defence for HMV 6×6 vehicles. That kind of order typically cheers investors, and it did the trick.

One-line summary? BEML broke a six-day losing streak. And how.

The table below compares today’s top gainers and losers among the Nifty 50:

Broader Markets: Midcaps, Smallcaps Under Pressure

It wasn’t just large-cap stocks that felt the heat.

Midcap and smallcap indices were both deep in the red by early afternoon, mirroring the broader pessimism. Nifty MidCap index dropped around 0.76%, while Nifty SmallCap fell over 1.2%.

Interestingly, many midcap counters were reacting more sharply than their larger peers. A sign that speculative interest is drying up?

Possibly.

One-sentence update? There’s no risk appetite left by lunchtime.

Sector Snapshot: IT Gets Hit the Hardest

Sector-wise, it was a clean sweep of red barring a couple of exceptions.

The Nifty IT index was down 1.43% intraday, making it the worst-performing sector for the day. That was followed by declines in the Private Bank and Realty indices.

Only two sectors bucked the trend.

Nifty Pharma added around 0.39%—thanks partly to Dr Reddy’s Labs—and Nifty Metal squeaked out a 0.15% gain. That’s about it.

Markets are clearly pricing in a cautious outlook from corporate India. And with global cues not lending any strength either, domestic investors were left jittery.

Infosys and Dr Reddy’s: Q1 Numbers at a Glance

Two big names. Two very different reactions.

Infosys:

• Q1FY26 revenue: ₹42,279 crore (↑ 3.3% Q-o-Q)

• Net profit: ₹6,921 crore (↓ 1.6% Q-o-Q)

• Street expected worse, but still—stock dipped

Dr Reddy’s Labs:

• Revenue: ₹8,545.2 crore (flat Q-o-Q, ↑11% Y-o-Y)

• Net profit: ₹1,417.8 crore (↓11% Q-o-Q, ↑2% Y-o-Y)

• Street wasn’t impressed, yet the stock gained over 2%

Investors shrugged off the miss from Dr Reddy’s. Perhaps the optimism is driven more by long-term confidence in pharma amid global uncertainty.

Not everything needs to be perfect to be appreciated.