Stock Market Highlights Today: Nifty slipped, is the IT trade over? – 11th August 2026
The Nifty 50 eased on Tuesday, giving up part of its recent gains as investors digested a valuation reset and the latest index rejig that will see BSE replace Wipro in the benchmark from September 30, according to NSE Indices. The move came on a day when Indian equities traded against a backdrop of firm crude prices and a weaker rupee, with concerns over the Strait of Hormuz and artificial intelligence driven disruption in IT services tempering risk appetite. The reshuffle, alongside fresh data on Nifty’s price to book and earnings multiples, kept the focus on how far the rally can extend without stronger profit growth.
The session was marked by a soft undertone rather than a sharp reversal, with the headline indices oscillating in a narrow band as traders weighed sector rotation triggered by the upcoming changes. Passive rebalancing linked to the Nifty 50, Nifty 100, Nifty Next 50 and Nifty 500 reviews is expected to influence flows in several names through September, which kept volumes elevated in index-linked counters. Market participants also tracked the India valuation narrative, where the Nifty’s price to book ratio has slipped below three times for the first time in nearly six years, even as earnings based metrics remain above long term averages.
According to NSE data, the key indices reflected this mixed tone.
Index Performance
| Index | Close | Move & % Change | Comments |
|---|---|---|---|
| Nifty 50 | approx. 24,470 | -115 pts (-0.5%) | Drifted lower as IT lagged and investors priced in index rejig and elevated valuations. |
| Nifty IT | approx. 31,775 | down 16% YTD | Recovering from a 32% slide to a July 52 week low, but still underperforming year to date. |
| India VIX | n/a | n/a | Volatility stayed contained despite upcoming passive flows and global crude uncertainty. |
The heart of Tuesday’s trade lay in the structural story around the Nifty 50 reshuffle and the broader valuation backdrop. NSE Indices said BSE will enter the Nifty 50 from September 30, replacing Wipro after the exchange operator’s six month average free float market capitalisation rose to at least 1.5 times that of the smallest constituent. Wipro’s exit is rooted in a relative decline in its free float market value, and comes at a time when the combined weight of India’s top five IT companies in the Nifty 50 has fallen below 9 percent this year, the lowest since at least 2002. At its peak about two decades ago, that group accounted for more than one fifth of the benchmark, underscoring how leadership has shifted toward financials, consumer discretionary and energy, with financials now carrying around 36 percent weight.
The sectoral pattern reflected this rotation, with IT continuing to trail even after a recent rebound from oversold levels. The Nifty IT index had plunged 32 percent from the beginning of 2026 to a 52 week low of 25,699 on July 1, and has since recovered about 24 percent to trade near 31,775, but it remains 16 percent lower for the year. Concerns over generative AI’s impact on traditional outsourcing models and slowing global technology spending have weighed on large software exporters. In contrast, segments linked to domestic financialisation and capital markets, including exchanges, have benefited from the growing ranks of investors in India’s 5 trillion dollar stock market, a trend that is now being reflected in benchmark composition.
Sectoral Performance
| Sector/Index | Direction | Key Drivers |
|---|---|---|
| Information Technology | down 16% YTD | Hit by worries over AI led disruption and softer global tech budgets despite a recent rebound from July lows. |
| Financials | up, 36% Nifty weight | Supported by domestic credit growth and the financialisation of household savings, reinforcing index leadership. |
| Capital markets / Exchanges | firm | Benefiting from rising investor participation, with BSE’s Nifty 50 inclusion highlighting the trend. |
Individual movers tied to the rejig and valuation story drew the most attention. Wipro shares, which have gained about 5 percent over the past month, are still down roughly 30 to 31 percent in 2026 and about 24 percent over the past year, delivering negative returns of more than 11 percent over three years and 39 percent over five years. Nuvama Institutional Equities and Nuvama Wealth Management estimate that Wipro could see passive outflows of about 149 to 240 million dollars as funds tracking the Nifty 50 adjust their portfolios. Exchange traded funds and index funds linked to the benchmark manage assets of around 9 trillion rupees, magnifying the impact of constituent changes.
BSE, by contrast, is positioned to receive meaningful inflows as it steps into the Nifty 50. One estimate cited potential passive inflows of nearly 700 million dollars into BSE as it becomes part of the benchmark, reflecting its rising market capitalisation and the market’s appetite for capital market infrastructure plays. Beyond the headline switch, four newly demerged Vedanta entities are also set to benefit from index inclusion. Vedanta Aluminium Metal, Vedanta Oil and Gas, Vedanta Iron and Steel and Vedanta Power will enter the Nifty 100 and Nifty Next 50 in various combinations, with Nuvama Alternative and Quantitative Research projecting combined passive inflows of up to 159 million dollars into these stocks.
Flows and breadth were shaped by these passive considerations rather than a clear directional bet on the macro. Vedanta Aluminium Metal alone is expected to attract about 149 million dollars of inflows, while Vedanta Oil and Gas could see around 4 million dollars and Vedanta Power and Vedanta Iron and Steel about 3 million dollars each. Among other Vedanta group names, Sterlite Technologies is estimated to receive around 10 million dollars of passive inflows, while the parent Vedanta Ltd could face an outflow of about 13 million dollars. The rupee added a cautious undertone, opening weaker at 95.39 per dollar compared with the previous close of 95.30, a 9 paise decline, as higher crude prices and dollar demand weighed on the currency.
Key Market Statistics
| Statistic | Value/Change | Context |
|---|---|---|
| Nifty price to book | 2.95x (July 27) | Below 3x for the first time in nearly six years, signalling a valuation reset but not outright cheapness. |
| Nifty trailing P/E | 20.5x | Above levels justified by 15% ROE and 10, 12% earnings growth, keeping the index between fair and average valuations. |
| Rupee vs USD | 95.39 (down 0.09%) | Weakened on the open as Brent crude neared 90 dollars a barrel amid Strait of Hormuz uncertainty. |
On the technical and valuation front, domestic brokerages and asset managers stressed that the recent de rating has moved the Nifty closer to fair value rather than into bargain territory. DSP Asset Managers’ Netra report noted that the index traded at 2.95 times book value on July 27, compared with 2.99 times on December 4, 2020, while implied return on equity has risen to 14.5 percent from 11.8 percent and the price to earnings ratio has declined to 20.5 times from 25.34 times. Axis Securities said Nifty is at 18.6 times 12 month forward earnings, slightly above its long term average of 18.2 times, with forward price to book in line with historical norms, implying that further appreciation will depend more on earnings upgrades than multiple expansion.
Global cues were not benign, with crude and currency markets signalling caution.
Global Cues
| Market/Asset | Movement | Notes |
|---|---|---|
| Brent crude | nearing 90 dollars a barrel | Supported by fading hopes of a breakthrough on reopening the Strait of Hormuz after fresh US demands on Iran. |
| USD/INR | rupee weaker to 95.39 | Higher oil and dollar demand pressured the rupee, adding to imported inflation concerns. |
The earnings backdrop, however, offered some support to the medium term narrative. HSBC’s Prerna Garg said India’s growth outlook has clearly improved, with 73 percent of companies reporting first quarter fiscal 2027 results meeting or beating expectations and consensus estimates being raised for commodities, financials, industrials and consumer staples. HSBC recently upgraded India to neutral within Asia, arguing that the market is likely to look through any further earnings downgrades as the year progresses. At the same time, S&P Global Ratings cautioned that “AI is a megatrend that could disrupt the business models of India based IT companies,” and expects competition from AI native firms to intensify over the next three years, a risk that investors will continue to price into large cap technology stocks.
The next catalyst for domestic equities will be the run up to the September 30 index changes, alongside incoming macro data and any resolution on the Strait of Hormuz that could stabilise crude and the rupee. Portfolio managers are likely to focus on style rotation and sector selection, with financials, capital market plays and select industrials benefiting from both earnings momentum and index flows, while IT remains a value hunting ground rather than a consensus overweight. For traders, the current setup suggests that Nifty’s path will be driven less by rerating and more by whether corporate profits can deliver the upgrades that justify its still elevated earnings multiples.
