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Sensex, Nifty Plunge as AI Fears Trigger Massive IT Stock Selloff

Indian equity benchmarks Sensex and Nifty fell sharply, losing around 0.8% in early trade, led by a severe selloff in IT stocks. The Nifty IT index was the biggest loser, plummeting over 4% on fears that advanced AI tools could automate services and threaten traditional revenue streams for IT firms. The selloff mirrored global trends, with Asian markets and US indices like the Nasdaq also declining. Broader market indices fell even more sharply, with all sectoral indices trading in the red during the session.

Key Points: AI Fears Cause Sharp Fall in Sensex, Nifty; IT Stocks Plunge

  • IT index plunges 4.43%
  • Broader markets fall over 1.3%
  • Global markets track Wall Street declines
  • AI automation sparks revenue fears
2 min read

Sensex, Nifty dip sharply as IT stocks plummet over AI fears

Indian markets tumble as IT stocks plummet over 4% on fears AI tools like Claude Cowork could automate traditional IT services and hit revenues.

"selloff in IT stocks was triggered by renewed fears that advanced AI tools could replace traditional services - Analysts"

Mumbai, Feb 13

The Indian equity markets posted notable losses early on Friday as IT stocks plummeted for the second consecutive session tracking weakness in US tech stocks over AI fears.

As of 9.25 am, Sensex lost 672 points, or 0.80 per cent, to reach 83,002, and Nifty lost 207 points, or 0.80 per cent, at 25,600.

Main broad-cap indices posted stronger losses than benchmark indices, as the Nifty Midcap 100 declined 1.38 per cent, and the Nifty Smallcap 100 dipped 1.62 per cent.

All sectoral indices traded in the red. Most notable loser was Nifty IT, down 4.43 per cent. Realty was down 2.70 per cent and media down 1.26 per cent.

Immediate support for Nifty is placed at 25,650-25,700 zone, while resistance is anchored at 25,900-25,950 zone, market watchers said.

Bank Nifty in the previous session touched a high of 60,864, slipped to a low of 60,597, and finally closed marginally lower at 60,739. Resistance is seen at 60,950-61,050, while support is placed at 60,450-60,550, analysts said.

Analysts said that the selloff in IT stocks was triggered by renewed fears that advanced AI tools could replace traditional services that generate large revenue streams for the Indian IT firms.

The launch earlier this month by Anthropic of "Claude Cowork," an AI assistant, had sparked fears of enterprise automation plug‑ins that could handle complete business workflows in an automated manner.

Asia-Pacific markets made losses in the morning session, tracking Wall Street declines over fears of artificial intelligence (AI) disruption eating into profit margins of traditional IT firms by automating several tasks.

In Asian markets, China's Shanghai index dipped 0.66 per cent, and Shenzhen declined 0.65 per cent, Japan's Nikkei lost 0.72 per cent, and Hong Kong's Hang Seng Index eased 1.77 per cent. South Korea's Kospi added 0.33 per cent.

The US markets ended largely in the red overnight as Nasdaq eased 2.04 per cent. The S&P 500 dipped 1.57 per cent, and the Dow Jones lost 1.34 per cent.

On February 12, foreign institutional investors (FIIs) net bought equities worth Rs 108 crore, while domestic institutional investors (DIIs) were net buyers of equities worth Rs 277 crore.

- IANS

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Reader Comments

P
Priya S
Very worrying for the lakhs of engineers and their families dependent on the IT sector. If AI starts taking over core services, what happens to all those jobs in Bangalore, Hyderabad, and Pune? The government needs to have a plan for upskilling.
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Rohit P
Midcap and Smallcap down more than Nifty... that's where the real pain is. My portfolio is deep in the red today. Time to hold tight and not panic sell. Market always corrects itself.
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Sarah B
Watching from the US. The fear here is real too, but India's IT sector has survived multiple disruptions before - Y2K, outsourcing criticism, cloud migration. They are resilient. This might be a necessary correction.
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Karthik V
The article mentions FIIs were net buyers yesterday even before this fall. That's a interesting data point. Maybe the big money sees value already. Retail investors like us get spooked too easily.
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Meera T
With all due respect to the analysts, this constant focus on daily ups and downs creates unnecessary panic. Most Indians invest for goals like children's education or retirement. We should ignore this noise and stick to our SIPs. 📈
V
Vikram M
Realty sector also down heavily.

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