Stock Market Updates: Sensex Tanks Over 700 Points, Nifty Below 25,600; Nifty IT Index Sinks 5%

Indian equity benchmarks extended losses on Friday, tracking weakness in global markets as a sustained sell-off in technology stocks continued to weigh on investor sentiment.

The BSE Sensex opened sharply lower at 83,011, down 664 points or 0.79 per cent, while the Nifty50 slipped 227 points or 0.88 per cent to 25,580 in early trade.

Broader markets also came under pressure, with the Nifty MidCap index declining 1 per cent and the Nifty SmallCap index falling 1.3 per cent.

Sectorally, the Nifty IT index plunged 5 per cent, led by a 5.6 per cent drop in Infosys. TCS, HCL Tech, LTIMindtree, Coforge and Wipro were also among the major losers. Meanwhile, the Nifty Metal index fell 2 per cent, adding to the overall weakness.

VK Vijayakumar, chief investment

strategist, Geojit Investment, said: “Markets have fallen into a turbulent phase which will cause some panic among investors even while offering opportunities. The sell off in AI stocks in US markets was expected but the timing and extent of the sell-off was not known. The 2.04 per cent decline in Nasdaq is not a crash. But if the downtrend continues it might pull the US market down. For the Indian market, this correction in AI stocks is a positive, because last year’s global rally was primarily an AI trade in which India, an AI laggard, couldn’t participate. So the unwinding of the AI trade, If it persists, is a positive from the Indian perspective. However, what is rattling the Indian market now is the massive sell-off in IT stocks, which is the second largest profit pool of India Inc. The real impact of the ‘Anthropic shock’ on the IT sector is yet to be ascertained. Panic selling in IT stocks at this stage may not be a good idea. Investors may wait and watch for the dust to settle.”

“The market turbulence can be used to accumulate high quality growth stocks, particularly those that have come out with good Q3 results. Auto stocks are likely to remain resilient, given the excellent results and growth prospects. Therefore, any downtrend in this segment due to market turbulence can offer buying opportunities,” he said.

Global Cues

Asian markets traded lower on Friday after renewed concerns over AI-led disruption in the US weighed on Wall Street, where the S&P 500 logged its third consecutive session of losses. Japan’s Nikkei 225 declined 1.69 per cent, South Korea’s KOSPI slipped 0.5 per cent, and Australia’s S&P/ASX 200 fell 1.3 per cent in early trade.

US equity indices ended sharply lower on Thursday as investors rotated out of technology stocks while digesting a heavy flow of economic data and corporate earnings. The S&P 500 dropped 1.57 per cent, the Nasdaq Composite fell 2.03 per cent, and the Dow Jones Industrial Average declined 1.34 per cent.