This AI tool triggers turmoil from US to India, IT stocks tumble; TCS and Infosys crash at open
Mumbai (The Uttam Hindu): Indian equity markets opened with a marginal gain on Wednesday morning, with most sectors trading in the green. However, losses in IT stocks limited the overall upside. Following negative cues from Wall Street, Indian IT shares declined amid rising competition in artificial intelligence and pressure on margins after Anthropic launched a legal tool for its cloud-based AI chatbot.
By 9:25 am, the Sensex was up 44 points or 0.05 percent at 83,783, while the Nifty gained 51 points or 0.20 percent to trade at 25,778. Broader markets showed limited gains, with the Nifty Midcap 100 rising 0.04 percent and the Nifty Smallcap 100 up 0.01 percent.
Except for IT and realty, all major sectoral indices were trading higher. The Nifty IT index fell sharply by 5.39 percent, while the realty index slipped 0.58 percent. Nifty Auto, Metal, Consumer Durables, and Oil and Gas emerged as top gainers, rising 1.12 percent, 1.38 percent, 1.05 percent, and 1.77 percent respectively. Market experts said immediate support for Nifty lies in the 25,550–25,600 range, while resistance is seen around 25,850–25,900.
Analysts believe that the rally triggered by the US–India trade deal may face hurdles ahead. Heavy selling in US IT stocks on Tuesday could further pressure the Indian IT index, as India remains a major software services provider to US companies. After Anthropic’s new AI launch, software stocks on Wall Street reportedly fell by up to 25 percent.
Experts also noted that valuations across most sectors remain high, limiting fundamental support for a sustained rally. The upcoming monetary policy meeting scheduled for February 6 is expected to see no change in interest rates.
Thursday’s market strength was largely attributed to short covering by foreign institutional investors. Sectors such as textiles and garments, gems and jewellery, and marine processing, which are expected to benefit from exports to the US, may witness further price action.
In Asian markets, China’s Shanghai index remained flat, while Shenzhen fell 0.88 percent. Japan’s Nikkei slipped 0.6 percent, Hong Kong’s Hang Seng declined 0.73 percent, while South Korea’s Kospi gained 0.72 percent.
In the previous trading session, US markets closed mostly in the green, though the Nasdaq dropped 1.43 percent. The S&P 500 fell 0.84 percent, and the Dow Jones declined 0.34 percent. On February 3, foreign institutional investors bought equity shares worth ₹5,236 crore, while domestic institutional investors purchased equities worth ₹1,014 crore.