Indian benchmarks end lower; IT index confirms bear market

India’s benchmark indexes fell on Wednesday, with information technology stocks confirming a bear market as worries over the U.S. economy prompted multiple stock downgrades.

The Nifty 50 closed 0.12% lower at 22,470.5, while the Sensex fell 0.1% to 74,029.76. During the session, the indexes oscillated between 0.7% decline and 0.4% gain.

Analysts said the Indian market has fared better than global equities since last week due to the moderating valuations after the sharp fall seen in the last few months.

“Indian equity market could be in the latter stages of correction unless some extreme unanticipated risk materializes,” Motilal Oswal Financial Services said in a note.

IT stocks fell about 3% to an eight-month low. The index also confirmed a bear market, falling more than 20% from the record closing high on December 13.

Infosys and Wipro shed 4.3% and 3.3%, respectively, and were the worst hit among IT and Nifty 50 stocks.

Indian benchmarks muted as IndusInd Bank, IT offset gains in other stocks

Morgan Stanley downgraded Infosys to “equal-weight” from “overweight”. Motilal Oswal cut Infosys and Wipro to “neutral” and “sell” ratings, respectively.

Concerns that a potential recession in the U.S. economy could hinder revival in discretionary spending weighed on IT stocks as the sector gets a major chunk of its revenue from the country.

U.S. President Donald Trump pledged to double tariffs on Canadian steel and aluminum but reversed course in just hours later, in rapid-fire moves that added to worries over the U.S. economy.

Of the 13 major sectors, five were down. The broader mid- and small-caps declined 0.2% and 0.6%, respectively.

Heavyweight financials rose 0.5%. Gains were led by HDFC Bank and Kotak Mahindra Bank, which climbed 1.5% and 2.5%, respectively.

India’s consumer price inflation in February eased to 3.61%, below Reuters’ forecast of 3.98% on moderating food prices, data showed after market hours.

Investors now await U.S. inflation data, due later in the day, which could influence future interest rate action.