Sensex and Nifty drop over 500 points in early trade on IT selling and crude oil pressure

Indian shares retreated in early Monday trade as heavy selling across information technology heavyweights and elevated global oil prices pushed benchmark indices down by over half a per cent.

The BSE Sensex dropped 536.30 points to hit an early low of 72,583.86, while the NSE Nifty 50 slipped 200.10 points to 22,402.80. The drop followed a difficult previous week in which both benchmarks shed roughly 2% amid overseas headwinds and persistent geopolitical friction in the Middle East.

What triggered the morning fall

A sharp slide in software exporters did the initial damage. The sector fell 2.3% in early morning trade, led by Infosys, which tumbled 3.4% after lowering its annual revenue growth guidance citing persistent softness across its North American business. Technology peers including HCL Tech also retreated, alongside consumer majors Hindustan Unilever and Asian Paints.

Energy costs added to the morning hesitation. Brent crude traded around $114 a barrel, having briefly touched $117 late last week amid concerns over regional Middle Eastern supply disruptions. Market participants were also positioning cautiously ahead of the US Federal Reserve's policy meeting on 27–28 October, where central bank guidance on interest rates could influence cross-border capital flows.

Asian peers offered little support at the opening bell, with South Korea’s Kospi dropping 1.43% and Japan’s Nikkei slipping 0.76%, while Hong Kong's Hang Seng bucked the trend with a modest 0.21% gain.

Global market moves

Domestic buying counters overseas jitters

While external factors triggered the opening decline, reports diverged on how the session progressed. Trading terminal updates showed indices stabilising near 72,600, while midday tracking indicated the market recovered its opening losses entirely, with the Sensex rising as high as 73,233 and the Nifty touching 22,644.

That resilience rests largely on massive domestic institutional support, which has continually absorbed external selling. Domestic institutional investors injected ₹3,235 crore into Indian equities in their latest session, taking their net purchases over the past 30 days to more than ₹82,500 crore. In contrast, foreign institutional investors have trimmed holdings by over ₹76,900 crore in the same monthly period, despite a brief net purchase of ₹888 crore on Friday.

Buying in select banking, pharmaceuticals and port logistics shares helped cushion the morning pullback, with Kotak Mahindra Bank, Sun Pharma, Axis Bank and Adani Ports bucking the decline.

What happens next

Technical analysts see immediate support for the Nifty around the 22,300 to 22,350 mark, with resistance near 22,800. While short-term volatility index levels have edged higher, market watchers note that India's domestic consumption base and disciplined macro indicators continue to offer a sturdy buffer that separates Dalal Street from more fragile emerging market peers.