Mumbai, February 12 The benchmark BSE Sensex fell by 558 points on Thursday amid heavy selling in IT stocks, as concerns over disruptions caused by AI and waning hopes of a Fed rate cut after strong US economic data weighed on investor sentiment.
The 30-share BSE Sensex declined by 558.72 points, or 0.66 per cent, to close at 83,674.92. During the day, it plunged by 716.97 points, or 0.85 per cent, to hit an intraday low of 83,516.67.
The 50-share NSE Nifty declined by 146.65 points, or 0.57 per cent, to end at 25,807.20.
Technology stocks led the decline, with Tech Mahindra, Infosys, and Tata Consultancy Services (TCS) falling by nearly 6 per cent each, emerging as major laggards on the Sensex.
HCL Technologies, Mahindra & Mahindra, Hindustan Unilever, Reliance Industries, Eternal, HDFC Bank, IndiGo, Kotak Mahindra Bank, and Adani Ports also ended in the red.
On the other hand, Bajaj Finance, ICICI Bank, Trent, Bharat Electronics Ltd, State Bank of India, Asian Paints, Bajaj Finserv, Titan, Larsen & Toubro, and Bharti Airtel were among the gainers.
The BSE MidCap Select Index fell by 0.48 per cent, while the SmallCap Select Index slipped by 0.28 per cent.
Among sectoral indices, the IT sector saw the steepest decline, falling by 5.40 per cent, followed by the IT sector by 5.29 per cent.
"A sharp correction in the IT index, triggered by mounting concerns over disruptions caused by AI, along with low expectations of a US Fed rate cut due to strong US job data and unemployment rates, dampened investor sentiment," said Vinod Nair, Head of Research, Geojit Investments Limited.
He added that in global markets, AI is reshaping markets by compressing margins in service-intensive sectors and increasing concentration-led volatility.
"In India, this technological shift is likely to structurally transform IT services by accelerating delivery timelines and automating volume-driven tasks, thereby challenging the traditional headcount-based outsourcing model."
"A weak sentiment in the IT sector, along with lingering geopolitical tensions between the US and Iran, may influence investors to adopt a cautious approach in the near term," Nair said.
In Asian markets, South Korea's Kospi closed over 3 per cent higher. Japan's Nikkei 225 index and Shanghai's SSE Composite index also ended on a positive note, while Hong Kong's Hang Seng benchmark finished in the negative territory.
European markets are trading higher in mid-session deals. US equities ended lower on Wednesday.
Meanwhile, Foreign institutional investors bought equities worth Rs 943.81 crore on Wednesday, while domestic institutional investors were net sellers of stocks worth Rs 125.36 crore, according to exchange data.
Brent crude, the global oil benchmark, fell by 0.27 per cent to USD 69.21 per barrel.
On Wednesday, the 30-share BSE Sensex slipped by 40.28 points to close at 84,233.64, while the NSE Nifty inched up by 18.70 points to settle at 25,953.85.
