Accenture’s Weak Outlook Triggers Sharp IT Sell-Off; Foreign Investor Outflows and Profit Booking Add Pressure

Indian stock markets witnessed a sharp correction on Friday as benchmark indices Sensex and Nifty snapped a five-day winning streak amid intense selling in information technology stocks. Weak global cues, continued foreign institutional investor (FII) selling and profit booking after a strong rally weighed heavily on investor sentiment.

The BSE Sensex tumbled as much as 831 points during intraday trade to touch 76,578, while the NSE Nifty 50 slipped below the crucial 23,950 mark, hitting an intraday low of 23,938. Market volatility also increased, with India VIX rising over 4%, indicating growing investor caution.

IT Sector Bears the Brunt of the Sell-Off

The biggest drag on the market came from information technology stocks after global consulting giant Accenture lowered its annual revenue growth forecast and issued weaker-than-expected guidance for the coming quarter.

The development triggered widespread concerns about slowing technology spending across global markets. Since Indian IT companies derive a significant portion of their revenues from overseas clients, especially in North America and Europe, investors rushed to cut exposure to the sector.

The Nifty IT index plunged more than 6%, marking its sharpest single-day decline in months and touching its lowest level since April 2023.

Major IT companies witnessed steep declines:

• Infosys fell nearly 8%
• Mphasis dropped around 8%
• TCS, Tech Mahindra and Persistent Systems declined about 7%
• HCL Technologies, LTIMindtree and Coforge lost around 6%

Market participants interpreted Accenture’s revised outlook as a warning sign that global enterprises remain cautious about discretionary technology spending despite increasing interest in artificial intelligence and digital transformation.

Foreign Investors Continue to Exit Indian Equities

Another factor weighing on market sentiment was continued selling by foreign institutional investors.

FIIs sold Indian equities worth more than ₹1,000 crore in the previous trading session, extending a trend that has persisted for much of 2026. Data indicates that cumulative FPI outflows from Indian equities have approached ₹2.9 lakh crore so far this year.

Although domestic institutional investors (DIIs) have continued to absorb much of the selling pressure, persistent foreign outflows remain a key concern for market participants.

Analysts believe that global interest rate expectations, geopolitical uncertainties and attractive valuations in other emerging markets have contributed to the recent FII withdrawals.

Profit Booking Emerges After Strong Rally

The correction also reflects profit booking after an impressive rally over the past week.

Before Friday’s decline, the Sensex had gained more than 4.5% in five sessions, while the Nifty had advanced over 4%. Such sharp gains often encourage traders and short-term investors to lock in profits, leading to temporary market corrections.

Despite the current weakness, market experts believe the broader medium-term trend remains constructive, supported by strong domestic economic fundamentals and healthy corporate earnings expectations.

Geopolitical Developments Remain in Focus

Investors are also closely tracking developments in West Asia following the recent memorandum of understanding signed between the United States and Iran.

Reports that follow-up negotiations involving senior US officials have been delayed have introduced fresh uncertainty regarding the future implementation of the agreement.

Any escalation in geopolitical tensions could impact global energy markets, crude oil prices and overall investor risk appetite, making the region an important factor for financial markets worldwide.

Broader Markets Show Relative Resilience

While frontline indices witnessed significant pressure, broader markets remained relatively stable.

The Nifty Midcap 100 index recorded only modest losses, while several small-cap stocks continued to attract buying interest. Sectorally, defensive pockets such as pharmaceuticals, healthcare and select media stocks outperformed the broader market and traded in positive territory.

This suggests that investors are rotating funds into sectors perceived as more resilient amid global uncertainty.

Technical Levels to Watch

Market analysts believe that the Nifty's immediate support zone lies between 23,850 and 23,950. A sustained move below these levels could trigger additional profit booking.

On the upside, the 24,250–24,400 range remains a crucial resistance area. A decisive breakout above this zone could revive bullish momentum and potentially lead to fresh highs.

For now, traders are expected to remain cautious as they assess global economic signals, foreign fund flows and corporate earnings guidance.

Outlook: Correction or Trend Reversal?

Most market experts view the current decline as a healthy correction rather than the beginning of a major downtrend. Domestic liquidity remains strong, economic growth continues to be resilient and corporate earnings expectations remain broadly positive.

However, volatility is likely to persist in the near term as investors navigate concerns over global technology spending, geopolitical developments and foreign investor activity.

The coming weeks will be critical in determining whether the market resumes its upward trajectory or enters a more prolonged consolidation phase.