Indian stock market suffered noticeable losses on Friday as investors' sentiment turned cautious after a weak start to the Q1FY26 earnings season. The BSE Sensex closed 690 points, or 0.83% down at 82,500.47, while the Nifty 50 settled at 25,149.85, down 205 points, or 0.81%. This is the second straight week when the benchmarks have registered a decline. The two indices fell about 1.1% each this week,
Broader indices mirrored the weakness on Friday, with the Nifty Midcap 100 slipping 0.8% and the Nifty Smallcap 100 declining nearly 1%, indicating a risk-off undertone across the market.
“Sentiment turned risk-averse amid mounting concerns over a tepid Q1 earnings season, exacerbated by Tata Consultancy Services' (TCS) underwhelming quarterly performance and cautious management commentary,” said Bajaj Broking in a note.
Sectorally, the sell-off was widespread. Nifty IT emerged as the worst hit, plunging 1.8%, as investor confidence in the tech space waned post-TCS results. Rate sensitive sectors such as Nifty Auto, Nifty Realty and Nifty Infra fell between 1 and 2% on Friday.
Shares of TCS fell 3.5% to settle at 3,264.50 on the NSE after the IT giant reported a drop in Q1FY26 revenue, especially a 3.3% sequential drop in constant currency revenue. Following this, brokerage firms such as Nomura and UBS trimmed their price targets for TCS.
US President Donald Trump's fresh diktat on tariffs renewed concerns of another round of trade war. He announced a 35% tariff rate for goods imported from Canada and signalled that the baseline tariff rates for countries that do not get tariff letters could be set at 15% or 20%, significantly higher than the current 10%.
"The domestic market experienced a negative close due to a sober start to Q1 earnings season and a ramp-up in the tariff threat by the US to impose a 35% tariff on Canada,” said Vinod Nair, Head of Research, Geojit Investments Limited.
Nair added that investors may continue to be focused on quarterly earnings for a buy-on-dips strategy; however, in the near term, the current premium valuation and the global headwinds like low spending & tariff uncertainties may restrain new inflows.
Ajit Mishra – SVP, Research, Religare Broking said that the Nifty had slipped below its first line of defense—the 20-day exponential moving average (20-DEMA)—disrupting the ongoing positive trend.
“We may now see a phase of consolidation in the index, with upcoming earnings keeping volatility high across sectors. In this environment, traders should exercise greater caution, focus on risk management, and be selective while identifying trading opportunities,” added Mishra.