Sensex, Nifty Erase Early Gains to Close Lower as IT and Auto Stocks Drag

Indian equity benchmarks gave up an early rally and closed lower on Wednesday, marking a volatile session in which gains built on easing crude oil prices could not be sustained through the day.

How the session played out

The BSE Sensex settled at 77,472.94, down 183.15 points or 0.24 per cent, while the NSE Nifty50 slipped 126.80 points, or 0.52 per cent, to close at 24,207.75. Both indices had opened firmer in the morning session, tracking a fall in crude oil prices after Iran and Oman outlined a framework for a temporary corridor through the Strait of Hormuz, a development that had briefly eased concerns about supply disruptions from the region. However, that optimism faded as the day progressed, with the indices trimming and eventually erasing their gains.

What weighed on sentiment

IT and FMCG stocks were the biggest drags on the market, with the Nifty IT index declining more than 1 per cent. Infosys led the losses among large caps, falling 1.84 per cent, followed by Power Grid, down 1.77 per cent, and Bharti Airtel, which slipped 1.70 per cent. On the other side of the ledger, Kotak Mahindra Bank, UltraTech Cement and Axis Bank were among the standout gainers, rising between roughly 1.7 and 3.7 per cent and offering some support to the broader market.

Broader market indices were mixed, with the midcap index ending marginally lower by about 0.10 per cent, while the smallcap index bucked the trend to close 0.81 per cent higher, suggesting selective buying interest away from the largest, most crude-oil-and-IT-sensitive names.

Why traders stayed cautious

Market participants pointed to a cluster of global events on the horizon as the reason for the pullback in risk appetite. Nvidia's second-quarter earnings were due after the close of US trading on Wednesday, with analysts widely expecting strong year-on-year growth in both revenue and profit, a report closely watched by global markets given Nvidia's outsized influence on technology and AI-linked stocks worldwide, including India's IT majors. Traders were also awaiting fresh US inflation data and continued to monitor developments in West Asia, where tensions tied to Iran's oil trade and shipping security in the Gulf have kept crude markets on edge in recent weeks.

The session's reversal also coincided with a flurry of block deal activity across several Indian stocks, including PhysicsWallah, the parent of investment platform Groww, and pharmaceutical companies Viyash Scientific and Rubicon Research, as large investors repositioned ahead of the busy earnings and macro data calendar in the days ahead.

With Nifty IT under pressure and global cues in flux, analysts said the market is likely to remain choppy in the near term until clarity emerges from Nvidia's results and the latest round of US economic data.

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