Sensex crashes nearly 900 points: What's behind today's decline?
What's the story
The Indian stock market witnessed a major decline on Friday. At the time of writing, the Sensex was trading at 870 points lower at 82,883, while the Nifty was down 269 points at 25,538.05. The fall was mainly led by a massive selloff in IT stocks, which were affected by fears of disruption from artificial intelligence (AI). Major IT companies like Infosys, TCS, HCLTech, and Wipro saw their shares plummet by 4-6%.
Market impact
Nifty IT index falls nearly 10% in 2 days
The sharp fall in IT stocks has resulted in a massive erosion of investor wealth on the Bombay Stock Exchange (BSE). The total market capitalization of BSE has fallen to around ₹467 lakh crore, with nearly ₹4.62 lakh crore wiped off from investors' pockets. The Nifty IT index also witnessed a major slump, falling over 4% and extending its two-day fall to nearly 10%.
AI impact
Fears of AI disruption weigh on IT stocks
The market downturn was exacerbated by fears of AI disruption after US-based startup Anthropic launched a new tool for corporate legal teams. The platform can automate contract reviews, NDA triage, compliance workflows, legal brief preparation and standardized responses. This has raised concerns over the long-term demand outlook for traditional IT services. "Tech stocks, reeling under the Anthropic shock, are unlikely to recover soon," warned V K Vijayakumar of Geojit Investments Limited.
Global influence
Global trends impact Indian market
The Indian stock market was also affected by global trends, with Wall Street ending sharply lower on Thursday. The tech-heavy Nasdaq fell nearly 2% amid fears of AI's disruptive impact on earnings visibility and sector margins. Asian markets followed suit, retreating from recent highs as concerns over margin pressures in the technology sector weighed on heavyweights like Apple.