The mood on Dalal Street has clearly turned sour after the tech rout globally. The benchmark indices slipped further as selling intensified.
The selloff deepened further, with the Sensex tumbling over 1,300 points, or 1.5%, to below 82,100, while the Nifty declined over 300 points, or 1.5%, to below 25,400 in the afternoon trade.
In the early trading hours, the Sensex was trading below 82,500, down 800 points or 0.9%. Similarly, the Nifty hovered near the 25,500 mark, lower by 200 points or 0.92%.
Furthermore, broader markets also came under pressure. The small and midcap indices sliding around 1%.So, what exactly is dragging the markets lower today?
Here are five key factors weighing on sentiment –
Tech stocks crack, Nifty IT hits 10-month low
The biggest pressure point for the market is the sharp fall in information technology stocks. The Nifty IT index has dropped to a 10-month low. At this hour, the Nifty IT is trading down 3.5%. All ten stocks in the index are trading in the red.
Heavyweights such as Infosys and TCS have declined more than 3%. HCLTech and Coforge are down over 4%. Other names like Tech Mahindra, Wipro and LTIMindtree have fallen more than 2%, while Oracle Financial Services Software is also trading lower.
The selloff in IT stocks is linked to ongoing concerns about how artificial intelligence could reshape traditional outsourcing and software services businesses. Anthropic’s new code to modernize Cobol and its potential impact on companies like IBM which primarily maintain and update the Cobol in mainframe computers has created jitters among investors. Global cues have added to the nervousness, and investors appear to be cutting exposure to the sector.
Anand James, Chief Market Strategist, Geojit Investments believes, “Oscillators being oversold, and with some of them showing positive divergence, recovery signs were beginning to be visible in the last few days. Standard deviation studies point to 29,961 as the nearest support for the Nifty IT Index. The upside reversal level is seen at 31,300, with further resistance seen at 36,200 for the Nifty IT index.”
Weak global cues after US market selloff
Global markets have added to the cautious mood. In the previous session on February 23, US equities saw a sharp decline. The Dow Jones Industrial Average dropped 821.91 points, or 1.66%, to close at 48,804.06. The Nasdaq Composite fell 1.13% to 22,627.27, while the S&P 500 declined 1.04% to end at 6,837.75.
Investors in the US reacted to persistent fears about artificial intelligence disruptions across industries, along with renewed uncertainty around tariffs after policy signals from President Donald Trump.
Rs 4 lakh crore wiped out in early trade
The sharp selloff in the morning session took a heavy toll on investor wealth. Within just the first 30 minutes of trade, nearly Rs 4 lakh crore was erased as stocks across sectors slipped into the red.
The total market capitalisation of companies listed on the BSE dropped to around Rs 465 lakh crore by in the early hours, compared to about Rs 469 lakh crore in the previous session.
Expert Outlook: Tariff drama and AI worries dominate
According to Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments, said, “President Trump’s State of the Union address today and the message that he would convey will be keenly watched by markets globally. The EU freezing the deal with US in the light of the tariff changes following the US Supreme Court verdict and Trump’s warnings to countries backing away from deals indicate that the tariff drama has more in store for economies and markets. We will have to wait and watch how this drama plays out.”
“Meanwhile the trend of weakness in tech stocks stemming from the potential AI impact continues. The weakness in the ADRs of Indian IT companies indicates that this segment will continue to remain under pressure,” he added.
Furthermore, he noted, “A positive trend in the market that will have significant bearing on the markets is the change in the FII strategy in India. FIIs have been buyers in ten out of the last seventeen trading sessions indicating their renewed interest in India. The improving corporate earnings in India is the principal reason for this change in FII stance. Given the robust macros of the Indian economy and improving corporate earnings, this FII buying trend can continue. Therefore, sectors in which FIIs have been buyers like capital goods and financials will remain resilient and the IT segment in which they have been sellers will continue to be weak. So, watch out for the stocks in these segments.”
Rupee opens lower amid tariff uncertainty
Currency movement is also reflecting caution. The rupee opened 4 paise lower at 90.92 against the US dollar, compared to its previous close of 90.88. Fresh uncertainty around US tariff decisions has affected emerging market currencies, and steady dollar demand from importers has added pressure on the rupee.