Indian equity markets fell on Thursday, January 09. The BSE Sensex dropped as much as 0.77% to 77,542.92 level while the NSE compiled Nifty 50 slipped 0.78% to an intra-day low level of 23,503, testing one of the important support levels. The Nifty 50 closed the session 0.69% lower at 23,526.50. The Sensex dropped 0.68% to finish at 77,620.21.

According to the analysts, the fall in markets can be attributed to the muted earnings expectations from TCS, the weak rupee, and continuous FII selling.

Here are three reasons why markets fell today

TCS’s Q3 earnings 

Tata Consultancy Services was expected to report muted quarterly earnings for the third quarter of FY25. TCS being the bellwether of IT companies sets the tone for other IT companies. Analysts anticipated that the revenue growth in dollar terms for Tata Consultancy Services would decline sequentially as a result of furlough effects and adverse currency fluctuations. However, the company posted a net profit of Rs Rs 12,380 crore for the third quarter of the current financial year, an increase of 5.5% on year, compared with Rs Rs 11,735 crore in the same quarter a year ago. Its revenue from operations stood at Rs Rs 63,973 crore, up 5.6% on year in Q3 FY25.

The domestic markets are “anticipating only modest improvement in Q3 earnings estimates, cautioning against high expectations,” said Vinod Nair, Head of Research at Geojit Financial Services.

Weak Indian rupee

The Indian currency recorded an all-time low of 85.9150 against the dollar on Thursday on the back of an uptick in the US dollar, a surge in US bond yields, and a hike in crude oil prices. This prompted an outflow of foreign institutional investors which further pressurised the rupee as well as domestic markets. “We expect the rupee to trade with a negative bias on weak domestic markets, strong dollar, and rising US treasury yields,” said Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan.

Continuos FII selling 

FIIs have been continuously selling in the domestic market amid lucrative US markets. The FIIs sold Rs 3,729.30 crore on January 09, as per the data of NSDL. They have been net seller for the past three months constantly. They were net buyers only for a single trading session out of the six trading days in January. As of January 08, FIIs have sold shares worth Rs 11,931.91 crore.

That said, Indian markets have been trading on a negative bias for a week now. “On the earnings side, while there are concerns in the short term, we don’t think there is any change to the long-term growth profile of the country,” said Pawan Parakh, Fund Manager at Geojit Financial Services.