Sensex down 400 pts from day’s high, Nifty near 23,350: Selling in IT shares among key factors behind…

Reports coming in for today mention that The key market indices The two key benchmark indices traded softer on Tuesday, paring their early upside amid sharp selling pressure in IT shares.

Earnings booking emerged at elevated marks, with the Sensex falling 186.80 points or 0.25 percent at 74,672.19, while the Nifty declined to 23,367.50, down 46.80 points or 0.2 percent, at around 11 a.m.

In early session, the Sensex was up 179.94 points, or 0.24 percent at 75,038.93, while the broader Nifty advanced 74.7 points, or 0.31 percent to 23,489.

All major Nifty sectoral indices declined, barring Metal and Realty. The Nifty Smallcap 100 declined 0.13 percent, while the Nifty Midcap 100 was flat with a gain of 0.10 percent.

Coal India advanced more than 2 percent after Morgan Stanley ⁠upgraded ​to "overweight" from "equal-weight" on improving earnings outlook.

Key factors behind market slide

1) IT selling: The IT index declined 1.5 percent, with CLSA and Goldman Sachs flagging subdued demand as a factor weighing on the medium-term earnings outlook.

"IT firms' management demand commentary going into the silent period for September quarter results stays wary at best," stated CLSA, adding that "weak macro fundamentals due to geopolitics, elevated rates and inflation pose downside risk to earnings."

LTM and HCL Technologies were among the major laggards in the Nifty IT index, falling up to 4 percent.

All constituents of the index, barring Oracle Financial Services Software, declined. Shares of Oracle Financial were up over 1% after closing over 8% softer Monday. The firm had clarified post market hours Monday that it isn't aware of developments around debt worth $18 billion for a data centre leased by its parent firm in New Mexico.

2) Climb in oil price marks: Brent crude, the global oil benchmark, traded 0.8 percent elevated at USD 101.1 per barrel after declining for four consecutive sessions until Monday.

A climb in crude prices can weigh on Indian markets as India imports a large share of its oil requirements. Elevated crude prices can gain the country's import bill and put pressure on corporate costs and margins. Equity market LIVE Updates

3) FII selling: Foreign Institutional Market participants (FIIs) offloaded equities worth Rs 576.20 crore on Monday.

4) Earnings booking: Earnings booking emerged at elevated marks after an early sharp climb. The markets had additionally settled elevated in the previous session, prompting market participants to book upside after buying shares at softer marks.

On Monday, the Sensex jumped 564.03 points, or 0.76 percent to settle at 74,858.99. Rising for the fourth day, the Nifty advanced 67.90 points, or 0.29 percent to end at 23,414.30.

Ponmudi R, CEO of Enrich Money, stated that the Nifty 50 opened marginally elevated near the 23,454 mark. The index will need to sustain above this level to maintain the recovery and move toward the 23,500–23,600 region. That stated, this zone stays an important resistance band, where renewed selling pressure could emerge. On the downside, 23,300 is likely to act as the immediate backing, followed by 23,200. Holding above these marks would help preserve the recent recovery structure, while a decisive break below 23,200 could weaken the setup and trigger renewed selling pressure. Momentum has improved marginally, with the RSI edging elevated to around 38, although it stays in weak territory, suggesting that the recovery is still in its early stages and requires stronger follow-through buying. Overall, the near-term technical outlook stays cautiously constructive.