Markets pare early losses as Sensex, Nifty stabilise despite sharp IT selloff

Indian equity benchmarks recovered from a weak start on Friday, with the Sensex and the Nifty clawing back early losses even as heavy selling in information technology stocks kept gains in check.

After opening lower, both indices steadied through the session as buying interest emerged in select banking, auto and FMCG counters. The rebound helped the benchmarks move off the day’s lows, signalling some resilience in broader market sentiment despite persistent pressure on IT shares.

Technology stocks remained the biggest drag, extending their recent decline amid concerns over slowing global demand, cautious commentary from overseas clients and uncertainty around discretionary tech spending. Large-cap IT names bore the brunt of the selling, weighing on overall market momentum.

Investors, meanwhile, appeared more willing to look beyond near-term volatility, selectively adding positions in domestic-facing sectors. Market participants pointed to stable cues from other Asian markets and expectations of supportive domestic fundamentals as factors aiding the recovery from early losses.

Analysts said the session reflected a market in transition, with stock-specific action taking precedence over broad-based moves. While the IT sector continues to face headwinds, strength in pockets of the market suggests investors are positioning cautiously rather than exiting risk altogether.

By the close, the Sensex and the Nifty had managed to trim most of their initial losses, underscoring a tentative shift towards stability even as sectoral divergences remained pronounced.