The announcement of a global reduction in workforce by Tata Consultancy Services (TCS) and disappointing quarterly earnings of Kotak Mahindra Bank triggered a heavy sell-off across the IT and banking sectors on Monday. Starting the week on a weak note, the Sensex declined 572.07 points or 0.70% to close at 80,891.02, while the Nifty fell 156.10 points or 0.63% to 24,680.90. Both indices have recorded losses of up to 2.22% over the past three sessions.
TCS Layoffs
On Sunday, TCS announced it would lay off 2% of its global workforce—approximately 12,260 employees—over the next year as part of a major restructuring initiative aimed at creating a more agile and future-ready organisation. Shares of the IT major fell 1.59% on Monday, followed by Wipro (down 1.57%), HCLTech (down 1.48%), and LTIMindtree (down 1%).
Kotak Mahindra Bank reported a net profit of Rs 3,281.68 crore for the April-June quarter, down 47.5% from the year-ago period. On Monday, its shares plunged 7.50%, marking their steepest single-day fall since April 25, 2024. The bank’s market capitlisation went down by Rs 31,685 crore. It was the top loser on both the Sensex and among the Nifty 50 stocks.
Other notable losers in the banking sector included IndusInd Bank, Union Bank, Indian Overseas Bank, Bank of India and Bandhan Bank.
Volatility Spikes
“Markets remained under pressure and declined over half a percent, extending the ongoing corrective phase. After an initial dip, the Nifty attempted a recovery, but sharp selling in Kotak Bank following its earnings and continued weakness in select heavyweights from the telecom and IT sectors dragged the index lower as the session progressed,” said Ajit Mishra, SVP – research, Religare Broking.
“Kotak Mahindra Bank was among the top drags post its Q1 earnings miss, while TCS and Infosys extended losses amid fresh layoff concerns in the sector. On the flip side, select FMCG and pharma stocks showed resilience, providing some cushion to the broader market,” said Vikram Kasat, head – advisory, PL Capital.
The broader indices also ended in the red, with the BSE Midcap and BSE Smallcap indices falling 0.73% and 1.31%, respectively. The market breadth was negative, with 2,881 losers against 1,256 gainers on the BSE.
Investor wealth eroded by Rs 3.80 lakh crore on Monday and by Rs 12.5 lakh crore over the past three sessions. The India VIX index surged 7% to 12.06, indicating heightened market volatility.
Sectorally, realty, telecom, capital goods, industrials, and banking were the top losers, declining up to 4.11%. The Nifty Private Bank index fell 1.65%, PSU Bank declined 1.2%, and the Nifty IT index dropped 0.71%.
Foreign portfolio investors (FPIs) were net sellers to the tune of `6,082.47 crore, while domestic institutional investors (DIIs) were net buyers, purchasing shares worth `6,764.55 crore, according to provisional BSE data.