Sensex Drops 487 Points as IT Stocks Crash in Early Trade.

The Indian equity benchmarks commenced Wednesday's trading session on a cautious note, following a historic rally in the previous session, while 06.05. The primary drag on the indices was the Information Technology (IT) sector, which witnessed a sharp sell-off in early trade.

Market Correction Following Record Surge

The downward movement on Wednesday is being characterized as a technical correction after Tuesday's unprecedented gains. The market had surged Importantly following US President Donald Trump's announcement of a new trade agreement with India on Monday, while 05. Analysts suggest that the current dip reflects profit-booking at higher levels.

Significant Slump in IT Sector Stocks

The IT sector emerged as the biggest loser in the early hours of Wednesday. 13%. 20%. 51%. Adani Ports and Kotak Mahindra Bank also traded in the red.

Mixed Market Breadth and Top Gainers

Despite the headline indices trading lower, the broader market sentiment remained mixed. Out of the 30 Sensex companies, 18 stocks managed to trade in the green, while 12 opened in the red. 22%. 93%. 38% respectively. In the Nifty 50 index, 26 stocks advanced while 24 declined.

Analyst Perspectives on Market Volatility

According to market analysts, the volatility observed on Wednesday is a reaction to the extreme optimism seen earlier in the week. Experts attribute the crash in IT stocks to global cues and potential adjustments in offshore portfolios following the trade deal news. Analysts noted that while the trade agreement provides a long-term positive outlook, the immediate price action is driven by valuation concerns in the technology sector. The market is expected to remain sensitive to further updates regarding the implementation of the trade pact and global macroeconomic data.

To sum it all up, the trading session on Wednesday highlights a divergence between sectors, with IT facing a significant setback while energy, metals, and banking stocks show relative resilience. The market continues to navigate through the implications of recent geopolitical developments and domestic liquidity flows.