Indian benchmark stocks slip as IT sector weakens, trade concerns linger

Indian equity benchmarks fell on Monday as losses in IT stocks and worries over additional U.S. tariffs pressured markets, although positive business updates that strengthened expectations of improved quarterly earnings helped limit the downside.

The Nifty 50 hit a record high of 26,373.20 earlier in the session but later reversed course and closed 0.30% lower at 26,250.3. The Sensex also declined, ending the day down 0.38% at 85,439.62. Both indices had risen about 1.5% over the previous three sessions, with the Nifty repeatedly setting new peaks.

IT stocks drag Indian sectors lower despite Asian market gains

Asian markets advanced and oil prices slipped as investors weighed the impact of U.S. military action in Venezuela. Back in India, selling pressure dominated, with ten of the 16 major sectors closing lower. IT stocks, which derive a significant portion of their revenue from the U.S., dropped 1.4% ahead of quarterly earnings announcements scheduled from next week. Citi Research said any recovery in the IT sector is likely to remain slow and uneven.

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HCLTech slid 2.2%, while Tech Mahindra fell around 1% after brokerage CLSA downgraded both stocks.

Trade concerns intensified after U.S. President Donald Trump warned that Washington could raise tariffs on India if New Delhi failed to curb purchases of Russian oil. The U.S. has already imposed tariffs of up to 50% on Indian goods, including punitive duties linked to India’s Russian crude imports.

In the broader market, small-cap stocks gained 0.5%, while mid-cap shares slipped 0.2%. Market participants largely stayed on the sidelines as geopolitical tensions escalated following the U.S. strike on Venezuela over the weekend, according to Ashika Institutional Equities.

Meanwhile, heavyweight HDFC Bank dropped 2.4% after its December-quarter business update showed loan growth outpacing deposit growth.

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