Sensex, Nifty Recover as IT Caps the Day and the Fed Tilts Hawkish

Indian markets opened sharply lower on Thursday, June 18, 2026, before reversing course by midday. The BSE Sensex fell 146.58 points to 77,009.04 in opening trade, while the NSE Nifty 50 slipped 36.25 points to 24,049.45, both gauges dragged by IT names. By early afternoon, the picture had flipped: the Sensex was trading 153.77 points, or 0.20%, higher at 77,309.39 and the Nifty up 42.60 points, or 0.18%, at 24,128.30, according to the live intraday tape.

The intraday reversal sat on top of two cross-currents from overnight. The Federal Reserve held its benchmark rate at 3.50% to 3.75% on Wednesday but lifted its 2026 year-end median projection to 3.8%, from 3.4%, signalling fewer expected rate cuts. Brent crude fell below $79 a barrel after the United States and Iran formally signed an interim peace agreement at the Group of Seven (G7) summit, opening the door to resumed traffic through the Strait of Hormuz. Energy-importing Asian markets posted gains while tech-heavy boards sold off, leaving a two-speed tape across the region.

Indian Equities Reverse an IT-Led Opening Dip

The IT selloff that opened the session dragged the broader indices, with Nifty losers including Infosys, Tech Mahindra, TCS, Tata Consumer and Maruti Suzuki. Nifty gainers were Max Healthcare, Trent, Bharat Electronics, Eicher Motors and HDFC Life, the Moneycontrol live blog reported.

Broader market breadth was healthier than the headline moves suggested. The Nifty Midcap index rose 0.2% and the Nifty Smallcap index added 0.5%, both holding above their previous closes through midday. Nifty Defence climbed 0.5%, extending a fifty-consecutive-session advance, while the Indian rupee firmed to 94.19 against the US dollar from the previous close of 94.53.

IT Stocks Extend a Six-Month Rout

The June 18 IT slide is the latest instalment of a rout that started in February. The Nifty IT index lost roughly 9% over four trading days in early June after the Nasdaq 100 sank 5% on a single Friday, the worst session since April 2025, Business Standard reported. The index had earlier hit a 52-week low of 27,078 on May 14, 2026, and the underlying names continue to set fresh lows in 2026, as the earlier Nifty IT slide on AI fears had already documented.

TCS has fallen 33% so far in calendar 2026, against an 11.5% drop in the Nifty 50, and printed a multi-year low of ₹2,144.10 earlier in June, its weakest level since August 2020. Wipro traded within striking distance of its 52-week low of ₹186.50 from March 30, slipping 6% to ₹187.80. Analysts cite three persistent pressures on the basket, summarized in the table below.

The AI angle shows up in management commentary. Infosys’s FY26 annual report said client spending and investment will keep moving toward AI in the near term, with the company positioning itself as an early beneficiary, Business Standard reported. Inside TCS, an internal directive asked managers to slot at least 5% of staff into Band D, the lowest performance grade, for the FY26 appraisal cycle, a quota move that stoked fresh layoff concerns inside India’s largest software exporter, as the TCS Band D quota and layoff concerns report had noted. Separately, HCLTech is preparing to lose a Xerox business process management contract by the end of June, with the work shifting to the Philippines. The job-loss and contract-loss headlines have layered onto the macro and AI overhangs, and Tier-2 names with stronger execution and AI monetisation, including Persistent Systems and Coforge, have outperformed the Tier-1 basket so far in 2026.

Warsh’s First Fed Tilts Hawkish on the Dot Plot

Wednesday’s decision was the Federal Reserve’s first under Kevin Warsh, who took over as chair from Jerome Powell last month. The committee voted unanimously to hold the federal funds rate at 3.50% to 3.75%, in line with the 99% probability that CME FedWatch had priced before the meeting.

Persistently high prices are a burden for the American people. But the recent past need not be prologue. I am pleased to report that members of the FOMC are unambiguous and unanimous. This committee will deliver price stability.

Warsh delivered the remarks at his first post-meeting press conference, on Wednesday, per details from Warsh’s first FOMC meeting. He used the same appearance to announce that the central bank will drop its practice of forward guidance on monetary policy, a shift that lets markets react to incoming data instead of telegraphed Fed reactions. Five new internal task forces were also unveiled, covering productivity, jobs, inflation and two other areas.

The hawkish surprise sat in the projections, not the rate. The median dot for the federal funds rate at the end of 2026 jumped to 3.8%, from 3.4% in March. The end-2027 median rose to 3.6%, from 3.1%, and the end-2028 median to 3.4%, also from 3.1%, according to the full FOMC dot plot breakdown. Behind the median, the distribution tilted clearly toward hikes: nine of eighteen officials who submitted a projection see at least one more hike this year, six see at least two, and only one anticipates a cut; Warsh did not submit a projection, leaving the chart with eighteen filled boxes out of nineteen.

On growth and jobs, the FOMC revised its 2026 real GDP forecast down to 2.2%, from 2.4%, and the unemployment projection to 4.3%, from 4.4%. The 2027 GDP forecast was kept at 2.3%, leaving the long-run potential growth estimate at 2.0%.

Inflation forecasts were the sharpest upward revision. Headline PCE inflation for 2026 was lifted to 3.6% from 2.7%, and core PCE to 3.3%, also from 2.7%, implying policymakers see the disinflation path as slower than the March projections assumed. US Treasury yields rose on the release, with the 2-year adding 8.4 basis points to 4.131% and the 10-year up 2.7 basis points to 4.455%.

Brent Drops Under $79 on the Iran Deal

The other half of the day’s tape was oil. Brent crude for August delivery traded at $78.29 a barrel at 02:22 GMT on Thursday, down $1.26 from the previous session, and WTI for July delivery traded at $75.42, down $1.37, according to the morning Brent and WTI price moves. The move extended a relief rally that began late last week when the US and Iran said a deal was within reach. By the open in Asia, both benchmarks were below the levels traders had flagged as the post-deal fair-value range.

The agreement itself is a fourteen-point memorandum of understanding signed by US President Donald Trump in Versailles, France, where he is attending the G7 summit. Iran’s foreign ministry said the document took effect on June 17 after Iranian President Masoud Pezeshkian signed it digitally.

The deal extends an existing ceasefire by sixty days and bundles several commitments into a single framework. The main terms, as reported by ICIS and others, are listed below. The remaining issues, including Iran’s nuclear enrichment programme and the sanctions architecture, are scheduled for a separate round of talks in Geneva on June 19.

• An immediate end to the war on all fronts, including Lebanon
• Full resumption of maritime traffic through the Strait of Hormuz
• Lifting of the US blockade of Iranian ports
• Waiver of US sanctions on Iran and the unfreezing of Iranian assets
• A $300 billion plan for the economic rehabilitation of Iran

Trump had framed the agreement in plain terms the day before the formal signing. ‘Let the oil flow!’ he said on Sunday evening, announcing that the US had reached a deal to end the war after more than one hundred days, per the expert roundup of the deal terms. Parliamentary speaker Mohammad Bagher Ghalibaf told Iranian state television on Thursday that the Strait of Hormuz ‘will not return to pre-war conditions’ after the sixty-day ceasefire, an early signal of friction ahead. The combination of a signed memorandum and an early pushback from Tehran leaves the Geneva meeting as the next checkpoint for the deal.

Asia’s Two-Speed Tape on the Same News

Asia’s closing tape split cleanly into winners and losers on the combined Fed-and-Iran news. Japan’s Nikkei and South Korea’s Kospi posted solid gains, while Hong Kong, Australia and mainland China slipped.

Energy-importing Asia, including Tokyo and Seoul, captured the bulk of the oil-relief bid. Hong Kong’s tech-heavy board carried the rate-sensitivity drag, the same force pulling down Indian IT names. Mainland China was caught between the two forces, with the Fed’s hawkish revision and softer domestic demand signs offsetting some of the oil benefit. The split ran along sector exposure rather than geography, with energy importers gaining and tech-heavy boards losing on the same news.

The pattern, broad relief followed by selective leadership, is the dominant shape of the regional session. Indian markets have had a more volatile relationship with the same cross-currents in the past week. Last Friday, the Sensex had surged 1,550 points on initial reports of a US-Iran deal, with all sixteen major sectoral indices on the NSE trading in the green, per the previous Friday’s Sensex rally on the deal. By Thursday, with the deal formally signed and the Fed’s hawkish tilt now in price, the sector map had narrowed back to a few clear leaders and laggards.

Currencies, Yields, and the Path Ahead

Cross-asset signals pulled in the same direction. The Indian rupee firmed against the dollar and the dollar weakened broadly as the priced-in rate-cut probability for 2026 fell. US Treasury yields rose across the curve, a classic reaction to a hawkish dot plot. The S&P 500 lost 1.21% on Wednesday after the Fed statement, the Dow Jones Industrial Average dropped 0.98%, and the Nasdaq Composite fell 1.34%, though the Dow had touched an intraday record earlier in the session.

Forecasts from major banks underline the shift. CME FedWatch implies a more than 50% probability of at least one rate hike by December. Capital Economics forecasts a rate hike in December 2027, followed by another early in 2028, while Goldman Sachs expects the Fed to wait until mid-to-late 2027 before its first cut.

On the energy side, the operational reality of the Strait reopening is still being absorbed. US crude inventories fell for a tenth straight week through June 12, dropping to their lowest level since 1985, ICIS reported, citing the US Energy Information Administration, while structural damage to LNG export facilities at Ras Laffan and slow mine-clearing in the waterway limit a quick return to pre-war flows.

The next dated pressure point sits a day out. Geneva hosts the Iran follow-up talks on June 19, with the nuclear file and the remaining sanctions architecture moving to the front of the agenda. For India, the IT tape and the rupee are the clearest live readings of the combined news, and both will set the tone for the next session.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Stock market investments carry risk, and figures cited are accurate as of publication on June 18, 2026. Readers should consult a qualified financial advisor before making investment decisions.