Nifty sinks to 24,544; IT stocks bleed, investor nerves fray as Wall Street contagion hits Dalal Street
The Indian stock market opened Thursday with a sharp jolt, as fears stemming from the United States’ fiscal health wiped out investor optimism across Asia.
At around 9:33 am, the BSE Sensex had nosedived by over 800 points, slipping to 80,784. The Nifty 50 wasn’t spared either—it dropped 269 points to 24,544, down by more than 1%. The mood? Uneasy.
Moody’s Downgrade Casts a Long Shadow
Blame it on Washington. Or more precisely, the growing debt pile sitting there.
Ever since Moody’s downgraded the US government’s credit rating last Friday, investor nerves have been on edge. The move raised alarms about America’s fiscal sustainability, and on Thursday, the ripple effects hit India hard.
This wasn’t a surprise to everyone, though.
US 20-year Treasury yields climbed to their highest levels since November 2023 overnight. That sent a clear signal: bond investors are bracing for higher risk premiums. And global equity markets caught the whiplash.
All 13 major sectoral indices in India opened in the red.
Even small-caps and mid-caps—often seen as shielded from overseas tremors—dropped 0.3% and 0.6%, respectively. No corner of the market was immune.
IT Stocks Take the Heaviest Blow
You’d think software exports would be recession-resistant. Not quite.
Indian IT stocks, deeply exposed to the US economy, were clobbered. The sector lost 1.5% right at the open.
Among the Sensex heavyweights, the usual suspects were bleeding red:
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Tech Mahindra
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HCL Technologies
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TCS
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Infosys
Revenue pipelines from the US are under scrutiny. Contract delays, possible budget cuts, and tightening capital expenditures among American clients have clouded the outlook.
One sentence here.
Brokerages flagged this as more than just a blip. Some even hinted at a possible earnings miss for the current quarter if the fiscal uncertainty drags on.
Who Led the Declines—and Who Didn’t
It wasn’t just the IT pack under pressure. Several frontline stocks contributed to the meltdown.
Here’s a quick breakdown of top Sensex laggards:
| Company | Movement |
|---|---|
| Power Grid | -2.7% |
| Nestle India | -2.4% |
| Hindustan Unilever | -2.2% |
| Mahindra & Mahindra | -1.9% |
| ITC | -1.8% |
| Tech Mahindra | -1.7% |
| TCS | -1.6% |
| HCL Tech | -1.5% |
But even on a grim morning, a few names bucked the trend.
Adani Ports and IndusInd Bank managed to post gains. Marginal, but in this context, significant.
Their resilience came from different sources—Adani Ports benefitting from recent global freight rate increases, while IndusInd’s steady Q4 results continue to provide ballast.
The Wall Street Connection
US equity indices closed lower on Wednesday night, weighed down by bond market moves. The NASDAQ, sensitive to rate movements, was hit the hardest.
Investors were reacting to growing expectations that the US Federal Reserve might be cornered into holding rates higher for longer. That’s due to inflation proving more persistent than hoped and fiscal balance sheets showing signs of wear.
All of this ties back to Moody’s move last Friday. The downgrade wasn’t massive—but it was symbolic.
Credit ratings don’t just shape borrowing costs. They shape sentiment. And global investors are reading the signs.
One-liner: They didn’t like what they saw.
Asian markets opened in sync with the US. Japan’s Nikkei was down over 1.3%, and South Korea’s Kospi slipped 0.8%. Hong Kong’s Hang Seng lost nearly 1% as well. The tide turned early—and it turned fast.
Traders Eye RBI and Fed for Next Moves
Domestically, attention now shifts to how the Reserve Bank of India will react—if at all.
The central bank has so far maintained a steady stance, prioritizing inflation control without throttling growth. But with external factors dominating the scene, there’s not much it can do immediately.
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Meanwhile, eyes remain glued on the Fed. Any hint of further hawkishness could send another shiver through emerging markets.
Currency movements also deserve a mention. The rupee weakened slightly against the US dollar in early trade, reflecting risk-off sentiment. Gold, on the other hand, gained marginally, as it often does when fear takes the driver’s seat.
What’s Next?
The big question now is whether this is just a knee-jerk reaction or the start of a broader correction. No one knows for sure.
But with 164 major Indian companies—including ITC, Sun Pharma, and GMR Airports—set to report their Q4 earnings today, the mood may swing again before the week is out.
Markets hate uncertainty. And right now, there’s no shortage of it.
