Today proved to be “Black Friday” for the Indian stock market. On Thursday, IT stocks fell so sharply that both the Sensex and Nifty benchmark indices fell. At around 9:45 am, the Sensex was trading 844.58 points or 1.01 per cent lower at 82,830.34, while the Nifty was down 260.80 points or 1.01 per cent at 25,546.40.
Indian equity benchmarks continued to fall on Friday amid weakness in global markets as sustained selling in technology stocks weighed on investor sentiment. The broader market also remained under pressure. During this period, Nifty Midcap index fell 1 percent and Nifty Smallcap index fell 1.3 percent.
Big fall in IT stocks
Sector-wise, the Nifty IT index saw a big fall of 5 per cent, with Infosys being the biggest loser. Its shares fell 5.6%. TCS, HCL Tech, LTIMindtree, Coforge, and Wipro also led with big losses, further adding to the weakness in the overall market.
Asian market situation
Asian markets were mostly down on Friday after overnight losses on Wall Street. Japan’s Nikkei 225 slipped 0.58% after briefly reaching 58,000. Topix also fell 0.58%. Meanwhile, South Korea’s Kospi rose 0.35%. However, the small-cap Kosdaq slipped 1.36%. Hong Kong’s Hang Seng index futures were at 26,703, down from its previous closing of 27,032.54.
US market decline
US indices have been falling for the last three sessions due to continuous selling in tech stocks. However, US stock futures were almost flat on Thursday. S&P 500 futures gained 0.02 percent and Nasdaq 100 futures gained 0.04 percent. Futures tied to the Dow Jones Industrial Average were unchanged.
Why did IT stocks fall?
The continued selloff in US technology stocks is largely due to heavy investment in AI. Investors are worried about whether the big investments being made by big tech companies in AI will yield the right returns.
Big tech companies like Amazon, Google, Meta and Microsoft are planning to invest about $650 billion to develop AI-related infrastructure. In this changing environment, all of them are competing to outdo each other. Rising spending levels have put pressure on margins, uncertainty around monetization, and fears of potential disruption to the global software and services ecosystem.
