Amid weak global signals and first quarter results, the Stock market plunged into negative territory during intraday trading on Friday, ending the strong market rally of the past few sessions. The two main stock benchmarks, Sensex and Nifty, Fell after IT bellwether Infosys cut its FY24 outlook to 1-3.5 percent in constant currency from its previous 4-7 percent forecast in the prior quarter.

At one point during the session, the S&P BSE Sensex was down more than 700 points, while the Nifty was trading below 19,800. At 2 p.m., the Nifty 50 index was trading at 19,810, down 0.84 percent or 169 points. The BSE Sensex recorded at 66,943 points, a decrease of 628 points or 0.93 percent.

Shares of Infosys fell more than 8 percent to Rs 1,326.30 apiece on BSE. Apart from that, HCL Tech, Wipro, Tech M, TCS, HUL, Ultratech Cement, Reliance Industries, Bharti Airtel and HDFC Bank were the other biggest laggards, falling to 3.6 percent. However, L&T, SBI, Kotak Bank, Power Grid, Axis Bank and Tata Motors rose to 2.6 percent.

In the broader market, BSE MidCap and SmallCap indices fell 0.3 percent and 0.07 percent, respectively.

Weak global signals and selling from domestic institutional investors also hurt sentiment.

Stocks sold off in almost every sector with the exception of a few, the most notable being PSU banking, media and real estate. The Nifty Smallcap 100 outperformed, but the midcap index fell.

Also Read: Infosys Shares Plunge 8 Percent on Sharp Price Drop

Here are some of the factors behind the crash

• According to analysts, the biggest demoralizing aspect of the market today was Infosys’ downward revision of guidelines, which hurt virtually every segment of the industry. According to a Bussines Standard, Osho Krishan, Senior Analyst at Angel One, said Infosys’ revised revenue growth forecast for FY24 led to some pessimism in the numerator, which fell nearly 9 percent in one day and dampened overall sentiment. The Nifty IT index fell nearly 4 percent, which is a major driver of the correction in Nifty50 during today’s trading session.
• Gaurav Bissa, VP, InCred Equities, according to MoneyControl underlined that the stock has reversed from a falling trendline on the weekly charts. However, the stock is currently trading above the previous swing low of 1250.
• Another contributor to this negative session was the heavyweights like RIL and HUL. Reliance Industries was hit hard after news of the split of its financial services arm, losing nearly 1,000 points. Hindustan Unilever fell sharply after Q1 results. The company’s domestic volume growth was 3 percent, which analysts estimate is significant, according to the reports.
• The week’s world markets also contributed to Friday’s stock market decline. According to reports, after gaining nearly 40 percent year-to-date, the Nasdaq suffered its biggest one-day loss since March on July 20, brought down by sharp post-earnings declines at tech companies Tesla and Netflix. Nikkei fell 0.6 percent. China’s blue chips also fell 0.2 percent, while Hong Kong’s Hang Seng rose 0.4 percent.