Another day, another disappointing trading day for investors after Sensex tumbled 1,048.16 points to settle at 82,626.76 and Nifty dropped 336.10 points to 25,471.10.
The sharp fall of the shares can be blamed on the anxiety around AI automation and fading hopes of an imminent U.S. rate cut, especially in the case of information technology (IT) stocks.
In today's trades, Nifty 50 fell 1.3 per cent and Sensex tumbled 1.25 per cent, eroding the gains from the India-US trade deal. "The ongoing IT rout implies the market is pricing the risks of uncertainty over whether Indian software firms will be able to retain productivity gains and protect their revenues," said Hiren Dasani, chief investment officer for emerging markets at Whiteoak Capital to Reuters.
As per Reuters, the 10 companies in the Nifty IT index have collectively lost about $50 billion in market value in February.
Among the Sensex constituents, Hindustan Unilever, Eternal, Titan, Tata Steel, Adani Ports, Tata Consultancy Services, PowerGrid, Reliance Industries, Bharat Electronics Ltd, Asian Paints, Mahindra & Mahindra, HDFC Bank and HCL Technologies were the major laggards.
On the other hand, Bajaj Finance and State Bank of India were the only gainers.
Meanwhile, Foreign institutional investors bought equities worth Rs 108.42 crore, while domestic institutional investors were also net buyers of stocks worth Rs 276.85 crore, according to exchange data.
Rupee dropped 0.05 per cent versus the U.S. dollar to 90.6350, as pressure from weak local stocks and elevated interbank dollar demand met likely central bank intervention to defend the currency.
"Risk sentiment has been dampened by renewed concerns over the disruptive impact of AI across industries. Safe haven assets rallied," IFA Global said in a research note.