Massive IT stock selloffs drag major indices down heavily
Tuesday morning brought severe pain to investors as Dalal Street plunged deep into red territory. Heavy selling pressure in major technology companies sparked a sharp Indian stock market decline. By roughly 10:17 am, the BSE Sensex plummeted a massive 798.49 points, settling at 82,496.17. Similarly, the NSE Nifty50 crashed 222.65 points to trade at 25,490.35.
Selling activity concentrated heavily within software companies, causing the Nifty IT Index to crash by over 3 percent during early trading hours. Major players like Tata Consultancy Services, Infosys, and Wipro witnessed intense offloading. This massive slide links directly to growing anxieties surrounding artificial intelligence advancements. US firm Anthropic recently released new tools capable of automating coding and data processing tasks. Investors fear these powerful AI systems will severely reduce future demand for traditional outsourcing services.
Geojit Financial Services Chief Investment Strategist VK Vijayakumar highlighted that this downward trend reflects ongoing AI concerns. He pointed out that the current weakness in Indian tech ADRs suggests prolonged pressure on this specific segment.
International developments also poured cold water on investor sentiment. Wall Street suffered overnight losses after President Donald Trump suggested imposing fresh tariffs. Such import taxes create massive uncertainty for international businesses. Furthermore, the European Union recently suspended a significant trade agreement with the United States over changing tariff regulations.
When global trade becomes unpredictable, foreign investors naturally turn cautious. Analysts suggest Trump's upcoming State of the Union address could introduce even more market volatility.
Foreign institutional investors have actually been buying domestic equities, though they completely avoid tech shares. Data shows FIIs remained net buyers in 10 out of the last 17 trading sessions, favoring financial and capital goods instead.
Market experts warn that Nifty faces critical support between 25,500 and 25,450. Breaking below this zone might drag the index down toward the 25,200 mark. Meanwhile, Bank Nifty paints a slightly better picture. It opened near 61,275 and looks relatively stable as long as it defends the 60,600 to 60,900 support levels.
