The Nifty IT index plunged nearly 6%, its steepest single-day fall in six years.
Markets closed marginally higher on Wednesday as a sharp selloff in information technology stocks, triggered by fears of artificial intelligence disrupting traditional software business models, offset gains in oil & gas and consumer-facing sectors, with the BSE Sensex rising 78.56 points or 0.09 per cent to close at 83,817.69 and the NSE Nifty adding 27 points or 0.10 per cent to settle at 25,754.55.
The Nifty IT index plunged nearly 6 per cent, its steepest single-day fall in six years, after US-based AI start-up Anthropic unveiled major upgrades to its Claude AI chatbot, including an end-to-end workflow automation productivity tool for legal services. “The selloff in the IT index was due to concerns that AI was creating more competition for software makers, after US AI-based Anthropic’s launch of a legal tool for its Claude AI chatbot,” said Sudeep Shah, Head – Technical and Derivatives Research at SBI Securities.
Infosys led the losers on the Nifty 50, crashing 7.37 per cent to ₹1,534.00, followed by TCS which tumbled 6.99 per cent to ₹2,999.90. HCL Tech declined 4.58 per cent to ₹1,617.60, Tech Mahindra fell 4.52 per cent to ₹1,639.00, and wipro dropped 3.79 per cent to ₹233.50. “While Oil & Gas, consumer durables, metals and automobile stocks recorded strong gains, IT stocks faced sharp selling pressure, tracking weakness in global technology shares. Sentiment in the sector deteriorated after AI start-up Anthropic unveiled an end-to-end workflow automation productivity tool, rekindling concerns that rapid advances in AI could disrupt traditional software business models and weigh on industry-wide profitability,” said Ponmudi R, CEO of Enrich Money.
On the gainers’ side, Trent surged 5.18 per cent to ₹4,021.00, eternal jumped 4.90 per cent to ₹293.50, ONGC advanced 3.50 per cent to ₹266.00, NTPC rose 2.30 per cent to ₹366.80, and Adani Ports gained 2.25 per cent to ₹1,565.20. Consumer Durables, Oil & Gas, and Metals indices led sectoral gains, each rising over 2 per cent, while the Nifty IT index’s 6 per cent decline made it the worst-performing sector. “Today, the benchmark indices witnessed narrow-range activity. The Nifty ended 48 points higher, while the Sensex was up by 79 points. Among sectors, the Consumer, Oil, and Gas indices rallied over 2 per cent, whereas the IT index corrected sharply, shedding nearly 6 per cent,” said Shrikant Chouhan, Head Equity Research at Kotak Securities.
Broader markets significantly outperformed the benchmark indices, with the Nifty Midcap 100 rising 0.63 per cent to 59,683.60 and the Nifty Smallcap 100 surging 1.27 per cent to 17,205.10. Market breadth remained firmly positive for the second consecutive session, with 2,726 stocks advancing against 1,477 declines on the BSE, reflecting an advance-decline ratio of 1.82. “Market breadth remained firmly positive, supported by a sustained rebound in midcap and smallcap stocks,” said Ajit Mishra, SVP Research at Religare Broking.
The Indian rupee snapped its two-day winning streakdepreciating 18 paise to close at 90.44 against the US dollar, weighed down by soft regional peers and rebounding commodity prices. “The Indian rupee’s two-day winning streak snapped today, weighed down by soft regional peers and a rebound in commodity prices. Market activity remained subdued as the focus shifts to Friday’s RBI interest rate announcement,” said Dilip Parmar, Research Analyst at HDFC Securities.
In commodities, spot gold extended gains for a second consecutive session, surging above $5,050 per ounce after aggressive dip-buying following last week’s brutal selloff. “Spot gold extended gains for a second consecutive session today, surging above $5,050/oz after rebounding sharply from lows below $4,500/oz hit last week,” said Kaynat Chainwala, AVP Commodity Research at Kotak Securities. WTI crude oil held above $64 per barrel after a massive 11 million-barrel inventory draw reported by the API raised expectations of a similar draw in upcoming EIA data.
Looking ahead, analysts expect the market to trade in a consolidation phase, with the Nifty’s immediate resistance placed at 25,800-25,850 levels and support at 25,600-25,500 zone. “After the recent sharp swings, some consolidation would be healthy as long as the Nifty holds the 25,400–25,500 zone. On the upside, the index may attempt a move towards the 26,000 level, followed by a gradual push towards record highs,” said Mishra. Market participants will closely monitor Friday’s RBI monetary policy decision and US jobs report for further directional cues.
Published on February 4, 2026