Profit Booking Drags Sensex and Nifty Down Amid Global IT Outage

Sensex and Nifty indices plummeted as investors booked profits after a notable rally. Global IT outages further exacerbated the downturn. Blue-chip stocks such as Reliance Industries and Tata Steel faced declines, while Infosys reported gains. Market leaders cited impending budget announcements as another factor for the profit booking trend.

Equity benchmark indices Sensex and Nifty took a nosedive on Friday as investors rushed to book profits after four days of a record-breaking rally. The global sell-off accelerated as it was triggered by an IT outage that caused devices to crash worldwide.

Fall in blue-chip companies such as Reliance Industries significantly dragged the benchmarks down.

The 30-share BSE Sensex hit a new all-time high of 81,587.76 in the initial trade but failed to sustain the momentum. It plunged 738.81 points or 0.91 per cent to close below the 81,000-mark at 80,604.65. NSE Nifty also tumbled 269.95 points or 1.09 per cent to end at 24,530.90 after hitting its peak of 24,854.80 during the opening bell.

Among the Sensex pack, Tata Steel tumbled over 5 per cent while JSW Steel fell nearly 5 per cent. Tata Motors, NTPC, UltraTech Cement, Tech Mahindra, Bajaj Finance, Power Grid, Mahindra & Mahindra, and Reliance Industries were also among major laggards.

Notably, Infosys climbed nearly 2 per cent after reporting a 7 per cent rise in its consolidated net profit for the April-June quarter, signalling an improvement in the IT sector. Stocks such as ITC, Asian Paints, and HCL Technologies were other gainers.

The downturn comes amidst high anticipation ahead of the Union Budget 2024. Analysts like Vinod Nair of Geojit Financial Services noted that operating system issues causing device crashes globally have led to market disruptions and profit booking.

Despite the IT outages affecting various industries, India's leading stock exchanges NSE and BSE reported no significant impact. Still, broader markets saw declines with the BSE midcap gauge tanking 2.31 per cent and the smallcap index dropping 2.22 per cent.

As profit-taking ensued, the metal index plunged 4.11 per cent, and other sectors including commodities, oil & gas, power, auto, utilities, realty, and services also ended lower. European markets were trading down, and US markets closed negatively on Thursday.