Why Is Indian Share Market Falling Today? Indian equity benchmarks extended their losses on Friday, mirroring weakness in global markets, as a sharp sell-off in technology stocks dampened investor sentiment.
The benchmark Sensex crashed over 900 points during the session, and investors lost about Rs 7 lakh crore in a session as the overall market capitalisation of BSE-listed firms dropped to nearly Rs 465.50 lakh crore from Rs 472.50 lakh crore in the previous session.
IT Rout Weighs Heavily
The primary drag on the market was the steep correction in IT stocks. The Nifty IT index plunged 5 per cent, led by a 5.6 per cent drop in Infosys. TCS, HCL Tech, LTIMindtree, Coforge and Wipro were also among the top losers. The Nifty Metal index fell 2 per cent, adding to the weakness.
According to VK Vijayakumar, Chief Investment Strategist at Geojit Investments, markets have entered a turbulent phase that may trigger panic among investors even as it creates opportunities.
“The sell-off in AI stocks in US markets was expected, but the timing and magnitude were uncertain. The 2.04 per cent decline in Nasdaq is not a crash. However, if the downtrend persists, it could weigh further on US markets,” he said.
Vijayakumar noted that from India’s perspective, the unwinding of the global AI trade — in which Indian markets did not fully participate last year — could eventually be positive. “What is unsettling the Indian market now is the massive sell-off in IT stocks, the second-largest profit pool of India Inc. The real impact of the ‘Anthropic shock’ on the IT sector is yet to be assessed. Panic selling at this stage may not be advisable. Investors may wait for clarity,” he added.
He suggested that the ongoing turbulence could be used to accumulate high-quality growth stocks, especially those that delivered strong Q3 results. Auto stocks, he said, are likely to remain resilient given solid earnings and growth prospects.
US CPI data
“The US CPI data is coming today, and the market is not expecting any optimistic outcome from this as the US economy is under severe challenge these days, especially the de-dollarisation threat by countries like Russia, China, Brazil, etc.” said Anuj Gupta, a SEBI-registered market expert.
Anuj Gupta said the US CPI data will be released after the Indian stock market closes, and the next two days will be weekly holidays for the Indian market. So, Indian stock investors don’t want to take any chances against the US CPI data by holding their positions on the last day of this week.
Profit-booking after India-US trade deal
“Profit-booking in the Indian stock market was widely expected after the recent rally in the Indian stock market post-announcement of the India-US trade deal. So, some credit for the weakness in the Indian stock market today should be given to this sentimental rise in the Indian stock market after the announcement of the India-US trade deal,” said Anuj Gupta.
Weak Global Cues
Global markets offered little comfort. Asian equities traded lower after renewed concerns over AI-led disruption in the US dragged Wall Street benchmarks down. The S&P 500 logged its third straight session of losses.
Japan’s Nikkei 225 declined 1.69 per cent, South Korea’s KOSPI slipped 0.5 per cent, and Australia’s S&P/ASX 200 fell 1.3 per cent in early trade.
On Thursday, US markets ended sharply lower as investors rotated out of technology stocks while assessing a heavy stream of economic data and earnings. The S&P 500 fell 1.57 per cent, the Nasdaq Composite dropped 2.03 per cent, and the Dow Jones Industrial Average declined 1.34 per cent.
With IT stocks under pressure and global sentiment fragile, market participants are likely to remain cautious in the near term.