The stock market closed on the red mark on Thursday, the fourth trading day of the week. Benchmark BSE Sensex fell 558 points on Thursday amid heavy selling in IT stocks as concerns over AI-based disruptions and subdued expectations of an interest rate cut by the Fed following strong US economic data negatively impacted investor sentiment.
The 30-share BSE Sensex fell 558.72 points or 0.66 per cent to close at 83,674.92. It declined 716.97 points or 0.85 per cent during the day to hit an intraday low of 83,516.67. The 50-share NSE Nifty fell 146.65 points or 0.57 per cent to 25,807.20.
Condition of Sensex companies
The Sensex fall was led by technology shares, with Tech Mahindra, Infosys and Tata Consultancy Services (TCS) being the major laggards, falling around 6 per cent each. Shares of HCL Technologies, Mahindra & Mahindra, Hindustan Unilever, Reliance Industries, Eternal, HDFC Bank, Indigo, Kotak Mahindra Bank and Adani Ports also closed in losses.
On the other hand, Bajaj Finance, ICICI Bank, Trent, Bharat Electronics Ltd, State Bank of India, Asian Paints, Bajaj Finserv, Titan, Larsen & Toubro, Bharti Airtel and Tata Steel were among the gainers.
BSE Midcap Select index fell 0.48 per cent, while Smallcap Select index declined 0.28 per cent. Among sectoral indices, Focused IT declined the most at 5.40 per cent, followed by IT at 5.29 per cent.
What is the opinion of experts?
Vinod Nair, Head of Research, Geojit Investments Ltd, said, “Growing concerns over AI-based disruptions along with strong US employment data and low expectations of US Fed cutting interest rates on unemployment rates dampened investor sentiment leading to a sharp fall in the IT index.” He further said that in global markets, AI is reshaping markets by squeezing margins in service-intensive sectors and increasing concentration-based volatility.
In India, this technological shift is likely to structurally transform IT services by accelerating delivery timelines and automating volume-based tasks, thereby challenging the traditional human-computation based outsourcing model.
“The weak environment in the IT sector, as well as the ongoing geopolitical tensions between the US and Iran, may influence investors to adopt a cautious approach in the near term,” Nair said.
There was a rise in European markets
In Asian markets, South Korea’s Kospi index closed with gains of more than 3 percent. Japan’s Nikkei 225 index and Shanghai’s SSE Composite index also ended on a positive note, while Hong Kong’s Hang Seng index closed in negative territory. European markets are seeing a rise in mid-session trading. US stocks closed with losses on Wednesday.
The price of Brent crude fell to US $ 69.21 per barrel.
Global oil benchmark Brent crude fell 0.27 percent to US$69.21 per barrel. Meanwhile, foreign institutional investors bought shares worth Rs 943.81 crore on Wednesday, while domestic institutional investors sold shares worth Rs 125.36 crore on Wednesday, according to exchange data. On Wednesday, the 30-share BSE Sensex closed 40.28 points lower at 84,233.64, while the NSE Nifty closed 18.70 points higher at 25,953.85.
