Sensex, Nifty slip as IT stocks fall on AI news
IT stocks slide sharply as investors react to Anthropic AI news
Indian stock markets were trading on a flat and quiet note on Wednesday, February 4. Early gains were limited as heavy losses in IT stocks pulled the market down. Buying in a few large stocks helped balance the fall.
The Sensex and Nifty50 both moved in a narrow range. The Sensex traded within a band of 656 points during the session. The Nifty50 touched an intraday high of 25,761 and a low of 25,563.
At around 9.27 am, the Sensex was up 81 points at 83,823. The Nifty50, however, was down 57 points at 25,785. The mixed movement showed that investors were unsure and cautious.
Big IT stocks saw strong selling pressure. Shares of Infosys, Tata Consultancy Services, HCL Technologies and Tech Mahindra fell sharply. These losses weighed heavily on the main indices. At the same time, buying interest in Reliance Industries, ICICI Bank, HDFC Bank, Mahindra and Mahindra and Bharti Airtel helped support the market.
Asian markets also sent mixed signals. Weakness in global technology stocks hurt US markets overnight. That mood carried over into Asia. Japan’s Nikkei slipped 0.67 percent. Hong Kong’s Hang Seng fell 0.45 percent. On the other hand, China’s Shanghai Composite gained 0.25 percent and South Korea’s KOSPI rose 0.74 percent.
Back in India, IT shares were the biggest drag. The Nifty IT index dropped more than 5 percent. Investors reacted sharply to fresh news around new AI products from Anthropic. Reports said these tools could disrupt the business models of many software and data companies.
Anthropic recently released new AI plug ins for its Claude Cowork agent. These tools can handle tasks in legal work, sales, marketing, compliance and data analysis. These areas are usually served by costly licensed software. The new tools are cheaper and faster, which raised concerns.
Investors fear that such AI products could hurt long term subscription revenue for IT firms. These high margin contracts are a key source of income for many Indian tech companies. The worry led to panic selling across the sector.
All ten stocks in the Nifty IT index were trading lower. Persistent Systems led the fall with a drop of over 6.5 percent. LTI Mindtree, Coforge, Infosys, HCL Technologies, Mphasis and TCS fell between 5 percent and 6.4 percent. The selling was broad and sharp.
Other sectors, however, showed strength. The Nifty Oil and Gas index was the top gainer. It rose over 1.5 percent, led by gains in Reliance Industries. The Nifty Auto, Consumer Durables, Metal and FMCG indices also moved higher. These sectors gained between 0.55 percent and 1.25 percent.
Broader markets were mixed. The Nifty Midcap 100 index was up slightly by 0.03 percent. The Nifty Smallcap 100 index did a bit better and rose 0.4 percent. This showed selective buying in smaller stocks.
In the Nifty50 pack, ONGC was the top gainer. The stock jumped 3.56 percent to ₹266. Coal India, NTPC, Mahindra and Mahindra, Power Grid, ICICI Bank, Reliance Industries and Jio Financial Services also rose between 1.5 percent and 2.25 percent.
On the losing side, Infosys, TCS, HCL Technologies, Tech Mahindra and Wipro remained under pressure. Bajaj Finance and IndiGo also featured among the top losers.
Overall market breadth was positive. On the NSE, 1,863 shares were advancing while 860 shares were declining. Despite the IT selloff, gains in other sectors helped keep the market steady.