Selling pressure intensified in late trade, dragging the benchmarks further down. The Sensex slipped 1.24% to 82,638.98, while the Nifty fell 1.27% to 25,480.60.
Heavyweight stocks remained under pressure. Hindustan Unilever saw sharper selling, slipping 4.51%, Eternal dropped 4.28%. TCS, Titan, and Tata Steel down 2% each.
The market opened on a weak note on the last trading day of the week, and the mood quickly turned tense. Within minutes of the opening bell, both benchmark indices slipped deep into the red.
The Sensex dropped around 1% to trade near 82,841.97, down over 800 points, while the Nifty fell close to 1% to hover around 25,597.70. The selling was not limited to a few stocks. The plunge was broad-based, with almost every sector facing pressure.
So, what exactly is dragging the market lower today? Let’s take a look at four key factors that explain the sudden slide –
IT stocks take a heavy hit
The biggest blow has come from the IT sector.
The Nifty IT index plunged more than 4%, making it the worst-performing sector of the day.
Heavyweights such as HCLTech, Infosys, Tech Mahindra, Wipro and TCS fell up to 6% in early trade.
The recent weakness is not linked to one specific company announcement. Instead, it reflects rising global concerns around artificial intelligence and its potential impact on traditional IT services.
Investors fear that rapid advances in AI tools could reduce demand for outsourcing work which is the backbone of India’s IT business model. Apart from these, ADR, NASDAQ fall also weighed on investor sentiment.
Global cues turn negative
The weakness in Indian markets is also tied to what is happening overseas. US markets saw a sharp sell-off, particularly in technology stocks, with the Nasdaq declining more than 2%. This fall has made investors cautious across global markets, including India.
Indian IT companies earn a large portion of their revenue from the United States. So when US tech stocks fall or when concerns rise about global technology spending, Indian IT shares often react immediately. The recent drop in US-listed receipts of Indian tech companies added to the nervousness before domestic markets even opened.
Sector-wide selling pressure
The weakness is not limited to IT. All sectoral indices in the Nifty were trading in the red. Realty and metal stocks were down around 2%, while auto, pharma and financial stocks also slipped.
What are experts saying
Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments, 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% 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,” he added.
“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 noted.