Sensex, Nifty gives up gains to close lower; IT stocks shine

Stock markets reversed course on Wednesday after the Sensex surged more than 800 points in early trade, with rising crude oil prices, foreign investor selling and profit-booking across sectors erasing the gains. IT stocks bucked the broader weakness, supported by optimism over quarterly earnings, while heavy selling in auto, financial, metal and realty shares weighed on the benchmarks.The BSE Sensex closed at 73,709.69, down 143.21 points or 0.19%.

The index had climbed to an intraday high of 74,682.19, gaining more than 800 points from its previous close, before reversing course. The NSE Nifty 50 fell 77.60 points, or 0.34%, to settle at 22,811.35.The reversal came as investors weighed optimism around the launch of Jio Platforms' record-breaking IPO against concerns over elevated crude oil prices and continued foreign investor selling.

The market also saw a sharp divergence between IT stocks and the broader market, with the Nifty IT index rising even as most other sectoral indices ended in the red.IT STOCKS EMERGE AS THE BIGGEST GAINERSIT stocks were the strongest performers on Wednesday, with the Nifty IT index rising 2.88%. HCLTech gained 3.40%, Infosys rose 3.31%, Tech Mahindra advanced 3.21% and TCS climbed 2.68%.

Wipro also remained firm, supported by the broader rally in technology shares. Recent quarterly results from major IT companies have improved sentiment, while the global sell-off in AI-linked stocks has prompted investors to reassess opportunities in Indian IT services companies.The sector's resilience helped limit the losses in the benchmark indices.

However, gains were concentrated in IT stocks, with weakness across several other sectors pointing to a lack of broad-based buying.AUTO, FINANCIAL AND METAL STOCKS DRAG Selling pressure was widespread across the market. The Nifty Auto index fell 1.54%, while the Nifty Financial Services 25/50 index declined 0.96%.

The Nifty Metal index dropped 1.71% and the Nifty Realty index lost 1.25%.Among Sensex stocks, Bajaj Finance was the biggest loser, falling 3.33%. Eternal declined 2.71%, Trent dropped 2.32%, Axis Bank fell 2.11% and Maruti Suzuki lost 1.94%.

Bajaj Finserv, Indigo and Kotak Mahindra Bank also ended lower.The Nifty Private Bank index declined 1.05%, while the Nifty PSU Bank index fell 0.51%. The Nifty FMCG index slipped 0.58%, and consumer durables stocks also came under pressure.BROADER MARKETS UNDERPERFORMThe weakness was more pronounced in the broader market.

The Nifty 100 fell 0.56%, the Nifty 200 declined 0.76% and the Nifty 500 dropped 0.92%.The Nifty Midcap 50 fell 1.60%, while the Nifty Midcap 100 declined 1.58%. The Nifty Smallcap 100 dropped 2.37%, indicating that smaller companies faced greater selling pressure than the benchmark indices.India VIX, a gauge of expected market volatility, rose 6.29% to 15.70, signalling increased nervousness among investors.CRUDE OIL AND FII SELLING WEIGH ON SENTIMENTCrude oil prices remained elevated, adding to concerns over India's import bill, inflation and corporate margins.

Brent crude rose 1.79% to $110.74 a barrel, while US West Texas Intermediate crude gained 2.13% to $99.93 in the latest supplied snapshot.Higher oil prices are a concern for India because the country imports a large share of its crude requirements. A sustained increase can put pressure on the rupee, raise input costs for businesses and complicate the inflation outlook.Foreign institutional investor (FII) flows also remain an important factor for the market.

While FIIs were net buyers in the cash market in the previous session, their persistent selling through much of 2026 has left Indian equities vulnerable to shifts in global sentiment. Domestic institutional buying and improving earnings have offered support, but Wednesday's weak market breadth highlighted the caution among investors.WHAT EXPERTS SAYVinod Nair, Head of Research at Geojit Investments Limited, said Indian equities gave up their strong early gains as elevated crude prices and continued FII selling overshadowed optimism surrounding India-US trade negotiations.He said profit-booking intensified across auto, financial, metal and realty stocks amid concerns over inflation and margin pressures, while IT stocks showed relative resilience on improving earnings visibility and renewed investor interest in the sector.Nair added that resilient second-quarter earnings and robust domestic institutional flows remain important supports for the market.

However, weak market breadth and persistent foreign selling point to continued caution.He said the near-term direction would depend on the breadth of earnings delivery, progress on trade negotiations and foreign investor flows. A sustained moderation in crude oil prices, global bond yields and currency volatility would also be crucial for market stability.WHAT SHOULD INVESTORS WATCH NEXT?Investors will track the next set of quarterly earnings, movements in crude oil prices, foreign investor flows and developments around India-US trade negotiations.

The performance of IT stocks will also remain in focus as markets assess whether earnings-led gains can continue to offset weakness elsewhere.Wednesday's sharp intraday reversal shows that positive company-specific developments may not be enough to sustain a broader rally while oil prices remain high and foreign selling persists. The next test for the market will be whether buying spreads beyond IT stocks and supports a more durable recovery.- Ends