The Indian stock markets witnessed a sharp decline on Thursday, erasing the gains made in the previous session. The Sensex plunged over 650 points, while the Nifty slipped below the 25,050 mark, dragged down by weak corporate earnings, persistent FII outflows, and sectoral pressure.
Key Reason: Nestle India’s Q1 Miss Sparks FMCG Worries
One of the main triggers for Thursday’s market fall was Nestle India’s Q1 FY26 results, which missed Street expectations.
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The company reported a 13.4% YoY decline in consolidated net profit at ₹646.6 crore.
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This was well below analyst projections of ₹751 crore.
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The dip was primarily due to higher raw material costs and rising expenses tied to expansion.
The weak results spooked investors across the FMCG sector, raising concerns about input cost pressures and margin squeeze going forward.
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Global Cues & FII Selling Add to Pressure
Foreign Institutional Investors (FIIs) continued their selling spree, offloading ₹4,209 crore worth of equities on Wednesday.
Persistent FII outflows reduce liquidity and typically drag down large-cap stocks, which directly impacts benchmark indices.
Adding to the gloom were rising crude oil prices and global trade concerns. Brent crude prices rose to $68.72 per barrel, heightening fears of cost inflation. Meanwhile, the European Union’s threat of 30% tariffs on US goods escalated trade tensions, casting a shadow on global equities.
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IT & Heavyweight Stocks Drag Indices
The Nifty IT index fell nearly 2%, primarily led by sharp declines in midcap IT companies:
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Persistent Systems and Coforge Ltd dropped 9% each.
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Infosys, with a 39.3% weightage in the Nifty IT index, slipped by 1%, causing a 150-point drag on the sector index.
The broader market also saw weakness from index heavyweights like Trent, Tech Mahindra, Shriram Finance, and Coal India, all falling up to 5%.
Persistent Systems, despite 3.9% QoQ revenue growth, faced selling pressure as sector sentiment weakened due to margin concerns and client shifts in the healthcare vertical.
Technical View: What’s Next for Nifty?
According to Anand James, Chief Market Strategist at Geojit Financial Services, the Nifty’s recent move toward 25,215 has not yet exhausted its rally.
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He noted a lack of strong breakout momentum, hinting at possible consolidation in the near term.
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A breakout above 25,400 could confirm a bullish pattern, while supports at 25,174 and 25,113 must hold to maintain positive sentiment.
Thursday’s market decline was a mix of corporate earnings disappointments, sectoral weakness, foreign investor exits, and global uncertainty.
Nestle India’s weak performance acted as a major trigger, leading to a broader sell-off in FMCG and IT stocks.
Until clarity emerges on global trade developments, FII flows, and corporate earnings, markets may remain in a consolidation phase.
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