Mumbai, February 24 – The Sensex and Nifty benchmark indices tumbled by more than 1% on Tuesday, driven by heavy losses in IT stocks amid concerns over disruption caused by artificial intelligence and renewed trade-related uncertainties.
Rising global crude prices, fueled by escalating US-Iran tensions and sluggish global economic indicators, also impacted investor sentiment, traders said.
The 30-share BSE Sensex plunged 1,068.74 points, or 1.28%, to close at 82,225.92. During the day, the benchmark fell 1,359.93 points, or 1.63%, hitting an intraday low of 81,934.73.
A total of 2,802 stocks declined, while 1,422 advanced and 143 remained unchanged on the BSE.
The 50-share NSE Nifty fell 288.35 points, or 1.12%, to close at 25,424.65. During the day, it decreased by 385.4 points, or 1.49%, hitting a low of 25,327.60.
A total of 32 stocks declined, while 18 advanced on the NSE.
"Investor sentiment weakened amid renewed concerns over global trade developments and rising geopolitical tensions, which kept crude oil prices elevated. Moreover, continued pressure on global technology stocks and fears of AI-led disruption further dragged domestic IT shares, amplifying the decline in the benchmark indices," said Ajit Mishra, SVP, Research, Religare Broking Ltd.
Tech Mahindra emerged as the biggest laggard, declining by 6.6%, followed by HCL Technologies, Eternal, Infosys, Tata Consultancy Services, Larsen & Toubro, Trent, Bharti Airtel, HDFC Bank, Bharat Electronics Ltd, and ICICI Bank.
On the other hand, NTPC, Hindustan Unilever, Tata Steel, PowerGrid, Titan, Reliance Industries, Axis Bank, and Sun Pharmaceuticals were among the gainers.
"Domestic markets registered a sharp decline, driven by significant weakness in IT stocks amid renewed global concerns over AI-driven disruption and margin pressures for traditional service providers. Global trade and tariff worries resurfaced, with additional pressure from Trump's warnings on trade deals and reports of possible national-security tariffs," said Vinod Nair, Head of Research, Geojit Investments Limited.
Broader indices also ended in the negative territory, with the BSE Smallcap Select Index falling 0.68%, while the Midcap Select Index slipped 0.54%.
"Weekly expiry of Nifty derivatives further added to intraday volatility, with markets reacting to a combination of weak global cues and sector-specific pressures. IT emerged as the worst performer, dropping 4.8% amid continued concerns around AI disruption to large outsourcing businesses and its impact on growth visibility," said Siddhartha Khemka, Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd.
Among the sectoral indices, Focused IT dropped the most by 4.80%, followed by Information Technology by 4.53%, Realty by 2.61%, Telecommunication by 1.79%, Consumer Discretionary by 1.12%, and Industrials by 0.91%.
On the other hand, Metal, Oil & Gas Power, Energy, Utilities, Commodities, FMCG, Healthcare, PSU Bank, and Capital Goods were among the gainers.
Realty stocks also came under pressure due to expectations that prolonged stress in the IT sector could weigh on real estate demand and valuations, Nair said.
In Asian markets, South Korea's Kospi, Shanghai's SSE Composite Index, and Japan's Nikkei 225 benchmark ended higher, while Hong Kong's Hang Seng closed in the red.
European stock markets were trading lower in mid-session deals, with Germany's DAX, London's FTSE 100, and Paris' CAC 40 trading down up to 0.27%.
"Meanwhile, escalating US-Iran tensions, marked by embassy staff evacuations and Iran's warnings of wider regional escalation, intensified risk aversion. Overall, markets remain highly sensitive to geopolitical risks and sector-specific pressures, driving investors toward defensive, domestically focused segments," Nair said.
The US equity market ended nearly 2% lower on Monday.
Brent Crude, the global oil benchmark, rose 0.22% to $71.66 per barrel.
Foreign Institutional Investors (FIIs) bought equities worth Rs 3,483.70 crore on Monday, while domestic institutional investors were net sellers of stocks worth Rs 1,292.24 crore, according to exchange data.
On Monday, the 30-share BSE Sensex climbed 479.95 points to close at 83,294.66, while the NSE Nifty advanced 141.75 points to close at 25,713.
Markets are likely to remain volatile within a broader range, driven by mixed global and domestic cues.
