Sensex down 1,160 pts, Nifty below 25,500 Why are markets falling today?

The total mcap of BSE listed companies dropped by ₹4.73 trillion to ₹4,63,79,242 crore versus the previous session’s mcap of ₹46,852,324.31 crore.

 

Indian stock market indices Sensex and Nifty 50 slumped 1 per cent in trade on Tuesday, dragged down by a sharp selloff in IT counters amid rising fears of AI-led disruption. The BSE benchmark opened with a loss of more than 1,100 points at 82,180 and made a low of 82,134, down 1,160 points or 1.4 per cent versus the previous close of 83,294. Likewise, the NSE Nifty index dropped 72 points to start the session at 25,641.80 and hit a low of 25,387.20, down 326 points or 1.26 per cent.

Around 01:00 PM, the 30-share pack quoted southward by 1,125 points or 1.35 per cent at 82,170 while the Nifty index traded with a cut of 308 points or 1.2 per cent at 25,405.

On the sectoral front, the Nifty IT index was the worst hit as it crashed 4 per cent to 30,292.85 with all the 10 constituents sitting in the red. The Nifty Media index fell 1.2 per cent while the Auto index dropped 0.68 per cent. The Nifty Bank index, which tracks the movement of 14 listed banks, however, defied the market trend to trade flat with positive bias at 61,267. 

In the broader markets, the Nifty Midcap 100 and Nifty Smallcap 100 also traded in the red with a cut of 0.50 per cent and 0.60 per cent, respectively. India VIX, the fear gauge index, was seen sitting at 14.

Top gainers, losers

From the Nifty pack, only 12 counters traded in the green with Power Grid, NTPC, Axis Bank, HUL and JSW Steel being the top gainers. Tech Mahindra, HCL Tech, Eternal,  Infosys, TCS, Airtel, Wipro, Trent, BEL, Bajaj Auto, Eicher Motors, L&T, Bajaj Finance, Adani Ports, Maruti, M&M, ITC and Jio Financial Services were the top losers.

On the BSE, 1,240 stocks advanced while 2,622 scrips declined with 127 hitting the lower circuit. From the Sensex pack, Infosys was the top drag as it weighed the index 149 points, followed by Airtel, TCS, Eternal and HCL Tech. Axis Bank, Power Grid, HUL, NTPC and Sun Pharma were the top contributors. 

Investors Lose ₹3.23 trillion

The total market capitalisation of BSE listed companies dropped by ₹4.73 trillion to ₹4,63,79,242 crore versus the previous session’s market capitalisation of ₹46,852,324.31 crore.

Here’s why markets are falling today:

IT stocks plunge: Shares of information technology (IT) companies, including Tata Consultancy Services, Infosys, and HCL Tech, witnessed heavy selling after Anthropic announced that its Claude Code Tool can help modernise legacy systems built on COBOL. 

The Nifty IT Index crashed nearly 4 per cent to hit a 52-week low of 30,328.60. All the index constituents fell by over 2 per cent each. Persistent Systems was down 6 per cent, followed by Coforge, down 5.5 per cent, Tech Mahindra, down 5 per cent, and HCL Tech, LTIMindtree, Infosys, and TCS, all down over 3 per cent.

According to Anthropic, Claude Code could now be used to automate the exploration and analysis that is the basis of Cobol modernisation complexities. 

Overnight, the US equity indices settled sharply lower as investors grappled with persistent fears around advances in artificial intelligence may disrupt software firms. The tech-heavy Nasdaq Composite fell around 1.13 per cent. 

VK Vijayakumar, chief investment strategist at Geojit Investments, said 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. 

Trump issues fresh tariff warning:Amid the continuing dispute after the US Supreme Court ruled President Donald Trump’s global tariffs unlawful, the Republican leader warned that nations attempting to “play games” would face even steeper tariffs and tougher measures.

Trump’s statement came after the SCOTUS ruled 6-3 that Trump had overstepped his authority in imposing the tariffs. Within hours, he signed an executive order introducing a 10 per cent global tariff on imports, moving swiftly to preserve his trade agenda.

According to Vijayakumar, President Trump’s State of the Union address today and the message that he will convey will be keenly watched by markets globally. 

“The EU freezing the deal with the 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,” he said.

Concerns over US-Iran tensions: Amid the ongoing fears of military action, the next round of talks between Iran and the US on a possible nuclear deal will take place on Thursday, February 26, in Geneva. The date was confirmed by the foreign minister of Oman, the country that earlier mediated the talks between the two countries. 

This comes after Trump, on Friday, said that he was weighing the possibility of a strike if Tehran failed to reach an agreement with Washington.

Monthly expiry pressure: Today is also the monthly expiry for Nifty. An expiry session is typically marked by high volatility due to traders rolling over their futures and options (F&O) positions. 

According to Nilesh Jain, VP- head of technical and derivative research at Centrum Finverse, Nifty on Monday formed a small-bodied bullish candle with long upper and lower shadows, indicating indecision at higher levels. A decisive move above 25,800 is crucial to trigger short covering, which could propel the index towards 26,000. On the downside, immediate support is placed at the 21-DMA near 25,570.

Sumeet Bagadia, executive director at Choice Broking, said that amid ongoing global uncertainties and heightened volatility, traders should adopt a cautious and selective approach, prioritising fundamentally strong stocks, especially during market dips. Avoid aggressive positioning at current levels. 

“A fresh buying opportunity may emerge only after a decisive and sustained breakout above the 26,000 mark on the Nifty, which would conf in a bullish bias b and indicate strengthening market sentiment. Until then, maintain disciplined risk management and a stock-specific strategy,” he said.

FII, DII Activity: After remaining net sellers for the previous two sessions, Foreign Institutional Investors (FIls) turned net buyers on February 23, purchasing equities worth ₹3,843 crore. With this, they also turned net buyers for the month. Meanwhile, Domestic Institutional Investors (DIIs) offloaded equities worth ₹1,292 crore.