India’s equity benchmark indexes were muted in early trading on Monday as losses in information technology stocks weighed on the market following Moody’s downgrade of the U.S. government’s credit rating. The Nifty 50 was up 0.02% to 25,024.35 and the BSE Sensex fell 0.03% to 82,302.82 as of 10:29 a.m. IST. Eleven of the 13 major sectors advanced, but a nearly 1% drop in IT stocks offset the gains.
The broader, more domestically focused small-caps CNXSMALLCAP gained 0.7%, and mid-caps rose 0.4%. Moody’s downgraded its rating on the U.S. government to AA1 from AAA, citing rising debt and interest “significantly higher than similarly rated sovereigns.”
“We saw a strong bounce-back in IT stocks last week in hopes the U.S. may avoid recession, but the Moody’s downgrade has again hit sentiments and pulled the sector down today,” said Anita Gandhi, founder and head of institutional business at Arihant Capital Markets.
Muted benchmarks amid IT decline
IT companies, which earn a substantial share of their revenue from the U.S., jumped 5.8% last week, marking the IT index’s second biggest weekly gain in 2025. The rating action also pushed U.S. Treasury yields higher, which could make equities in emerging markets such as India less attractive for foreign investors. Most Asian markets were lower on the day, with MSCI Asia ex Japan down 0.8%.
U.S. equity futures and the dollar also slipped. Among individual stocks, Divi’s Laboratories jumped more than 5% and was the biggest percentage gainer among large-cap stocks after it posted a rise in fourth-quarter earnings. Creditaccess Grameen slipped about 5% as its quarterly profit fell on account of lower net interest income.
