Sensex, Nifty: Why stock market is falling today; ask Axis Bank, Infosys

Benchmark indices Sensex and Nifty took a beating on Friday morning as despite a strong set of Q3 numbers from index heavyweights Reliance Industries Ltd and Infosys Ltd, December quarter results of Axis Bank disappointed, dragging the whole banking pack with it. Besides, despite the beat on Q3 earnings by Infosys, its revised revenue guidance range for FY25 suggests a likely de-growth in Q4 in constant currency (CC) terms, while its muted mega deal wins raised concerns over the Street expectations of double-digit growth in FY26.

To be precise, out of 600-point odd fall on Sensex, Infosys alone contributed 340 points to the index fall. Axis Bank Ltd and its private peers ICICI Bank Ltd, HDFC Bank Ltd and Kotak Mahindra Bank Ltd contributed another 450 points to the fall. This was partially offset by Reliance Industries that contributed about 150 points positively to Sensex.

At 11.30 am, the BSE Senex was down 619.32 points or 0.80 per cent at 76,423.50. The 50-pack NSE Nifty stood at 23,155.15, down 156.65 points or 0.67 per cent.

Among global cues, even as declining dollar index and US bond yields are positive, the declines are not adequate to arrest the sustained selling by FIIs, said V K Vijayakumar of Geojit Financial Services who believe any significant recovery in the market will be sold into.

“The correction in the market has made largecap valuations reasonable. Nifty is now trading at around 19 times estimated FY 26 earnings. Therefore, long-term investors, who can ignore the volatility caused by FII selling, can use the dips to buy high quality largecaps. The bounce back of this segment is only a question of time,” he said.

The Infosys stock plunged 5.71 per cent to hit a low of Rs 1816.10 on BSE. The stock is up 10 per cent in the past one year.

“Though the FY25 revenue guidance has been revised upward, it implies minus 2.2 per cent to minus 0.2 per cent QoQ growth in CC for Q4, indicating a potential revenue decline due to seasonality, fewer working days and drop-in third-party revenue seen in Q3,” said Sharekhan said.

In the case of Axis Bank Ltd, the private lender failed to deliver on earnings in the December quarter, leading to analyst downgrades. Analysts said the Axis Bank Q3 results were a miss of all parameters. Slippages jumped, driven by agri and unsecured, credit cost remained highest among top 5 banks and deposit growth the slowest. The inline Q3 earnings, they said, was a result of lower opex offset higher provisions. This stock fell 5.31 per cent to Rs 985.

“We expect muted mid-single digit EPS growth in FY26, and re-rating to be gradual as the profitability gap vs peers narrow,” IIFL Securities said.

ICICI Bank, TCS, Kotak Mahindra Bank, HCL Tech, HDFC Bank and IndusInd Bank were among major Sensex losers, falling up to 1.7 per cent.

Reliance Industries gained 2.14 per cent to Rs 1,295.85. Reliance Industries Ltd (RIL) impressed stock analysts with its December quarter results, which lead a few brokerage upgrade the stock to ‘Buy’ from “hold” earlier. Analysts said the stock is trading at attractive valuations, having falling 19 per cent in the past six months and could see buying ahead.