The continuous decline in the Indian stock market continued on Friday (February 13). At around 11:45 am, the Sensex was seen trading at 82,861 with a huge fall of 813 points, while the Nifty fell by 252 points or about 0.98 percent to around 25,550. The biggest factor in the market’s weakness has been the IT sector, where the fear created by Artificial Intelligence (AI) has wiped out ₹6 lakh crore of investors in 8 days.
The Indian IT sector, worth about $250 billion, is currently going through a very difficult phase. According to the data, in the last 8 trading days, about ₹ 6 lakh crore has been wiped out from the market cap of IT companies. During this period, Infosys has fallen by about 21 percent, TCS by about 19 percent and HCL Tech by about 17 percent. The market cap of TCS has fallen below Rs 10 lakh crore, which is even lower than the level of October 2020.
Along with IT, heavy selling was seen in other sectors also. Nifty Metal and Nifty Realty indexes recorded a decline of more than 3 percent. In the metal sector, shares of Hindalco and National Aluminum fell by about 5 percent. Whereas in the realty sector, DLF and Godrej Properties were seen trading with a decline of about 4 percent.
Interestingly, despite strong results and orders worth more than Rs 2,300 crore, shares of Hindustan Aeronautics Limited (HAL) did not see a big rise and were up only 2 percent till 11:50 am.
The main reason for nervousness in the market is the selling in tech stocks in America and the increasing fear about new technologies. In particular, the new tools of American AI startup Anthropic and its Claude 4.6 model have raised questions on the traditional IT service business. Investors fear that AI will weaken the headcount-based billing model and lead to reduction in jobs and working hours in IT companies.
Heavy pressure was also seen in the American stock markets. The Dow Jones Industrial Average fell 669 points (1.34%) to 49,451, the Nasdaq Composite dropped 2.03 percent to 22,597, the S&P 500 slipped 108 points (1.57%) to 6,832. Since the major earnings of Indian IT companies come from America, the weakness there has had a direct impact on domestic IT stocks.
The picture in the domestic market is very weak. Around 2,500 stocks are trading in the red, while the number of gainers is less than 1,000. 118 shares have reached 52-week low and 62 shares have hit lower circuit. Globally, investors’ eyes are fixed on America’s inflation data (CPI data). Amidst this uncertainty, the yield of American 10-year treasury bond has fallen to 4.10 percent.
Amidst this sharp decline, JP Morgan has called it a buying opportunity. The bank believes that IT companies are the plumbers of the technology world and their need will remain despite AI. However, investors are still skeptical about the future of the traditional outsourcing model. It will become clear in the coming weeks whether the worst is over for IT stocks or whether further decline is still to come.
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