Markets decline in early trade dragged by IT stocks, weak Asian trends

By | May 19, 2025

Indian equity benchmarks opened lower on Monday as investors turned cautious amid a sharp sell-off in IT stocks and weak cues from Asian peers. The BSE Sensex dropped over 350 points in the opening session, while the Nifty 50 slipped below the 22,200 mark, reflecting broad-based weakness across sectors.

IT Sector Drags Down Markets

The IT sector led the decline, with heavyweights like Infosys, TCS, and HCL Technologies falling between 1.5% and 3%. Investors are increasingly concerned about slowing global tech demand, especially from the United States, which remains a key revenue market for Indian IT companies.

Market experts cited disappointing Q4 earnings guidance and rising fears of a global slowdown in enterprise tech spending as primary reasons behind the sell-off. “The IT pack is facing sustained pressure due to weak commentary and lower deal wins. This is now weighing heavily on overall market sentiment,” said Ramesh Desai, a senior analyst at Axis Securities.

Asian Markets Set a Weak Tone

Asian markets were broadly negative, following a mixed close on Wall Street last week. Tokyo’s Nikkei, Hong Kong’s Hang Seng, and South Korea’s Kospi all opened in the red as investors reacted to softer-than-expected Chinese industrial data and concerns over the U.S. Federal Reserve’s policy path.

“There’s a risk-off mood globally. Uncertainty around the Fed’s next rate move, combined with sluggish demand in China, has dampened sentiment in Asia, and India is following suit,” noted Ananya Mukherjee, a macroeconomist with Capital Strategies.

Broader Market Performance

Apart from IT, stocks in the auto, FMCG, and pharma sectors also witnessed mild profit booking. However, banking and financials remained relatively resilient, with HDFC Bank and ICICI Bank trading in the green.

The Nifty IT index plunged over 2.5%, marking its steepest intraday fall this month. Meanwhile, the India VIX, which measures market volatility, spiked over 5%, indicating heightened nervousness among traders.

Rupee and Oil Prices Add to Jitters

The Indian rupee opened marginally weaker at ₹83.45 against the US dollar, reflecting foreign fund outflows and strength in the dollar index. On the commodities front, Brent crude hovered near $84 per barrel, raising concerns about import-driven inflation.

Outlook: Volatility Ahead

Market participants expect the near-term outlook to remain volatile. The upcoming U.S. Fed minutes, global inflation data, and corporate earnings in India are likely to steer investor sentiment.

“Markets are in a consolidation phase. With earnings season unfolding and global uncertainties in play, we expect heightened choppiness,” said Rahul Sharma, Director of Research at EquitySignals.

Key Levels to Watch

  • Nifty 50 Support: 22,050
  • Nifty 50 Resistance: 22,450
  • Sensex Key Range: 72,500 – 73,800

Conclusion:

The weak start to the week underscores investors’ growing unease amid global headwinds and sector-specific pressure. As IT stocks struggle to find footing and global cues remain shaky, traders may need to brace for more volatility in the sessions ahead.