The Nifty IT index fell nearly 6%, its steepest single-day decline in six years.
The Nifty IT index fell nearly 6 percent, the steepest single-day decline in six years, after US-based AI startup Anthropic unveiled major upgrades to its Claude AI chatbot, including an end-to-end workflow automation productivity tool for legal services. “The sell-off in the IT index was due to concerns that AI was creating more competition for software makers, after US AI-based Anthropic launched a legal tool for its Claude AI chatbot,” said Sudeep Shah, head – Technical and Derivatives Research at SBI Securities.
Infosys led the losers on the Nifty 50, falling 7.37 per cent to ₹1,534.00, followed by TCS which fell 6.99 per cent to ₹2,999.90. HCL Tech fell 4.58 per cent to ₹1,617.60, Tech Mahindra fell 4.52 per cent to ₹1,639.00 and Wipro fell 3.79 per cent to ₹233.50. “While oil and gas, consumer discretionary, metals and automotive stocks posted strong gains, IT stocks faced sharp selling pressure, tracking weakness in global technology stocks. Sector sentiment worsened after AI startup Anthropic unveiled an end-to-end productivity tool for workflow automation, fueling concerns that rapid developments in AI could disrupt traditional software business models and undermine profitability across the sector could depress,” said Ponmudi R, CEO of Enrich Money.
On the gainers’ side, Trent rose 5.18 per cent to ₹4,021.00, Eternal rose 4.90 per cent to ₹293.50, ONGC rose 3.50 per cent to ₹266.00, NTPC rose 2.30 per cent to ₹366.80 and Adani Ports gained 2.25 per cent to ₹ 366.80. ₹1,565.20. The consumer discretionary, oil and gas and metals indices led the sector gains, each rising over 2 per cent, while the Nifty IT index was the worst performing sector with a decline of 6 per cent. “Today, benchmark indices witnessed subdued activity. The Nifty ended 48 points higher, while the Sensex rose 79 points. Among sectors, consumer, oil and gas indices rose over 2 per cent, while the IT index corrected sharply and fell nearly 6 per cent,” said Shrikant Chouhan, head of equity research at Kotak Securities.
The broader markets significantly outperformed the benchmark indices with the Nifty Midcap 100 rising 0.63 percent to 59,683.60 and the Nifty Smallcap 100 rising 1.27 percent to 17,205.10. The market breadth remained firmly positive for the second straight session with 2,726 stocks rising against 1,477 declines on the BSE, reflecting an advance-fall ratio of 1.82. “Market breadth remained firmly positive, supported by continued recovery in midcap and smallcap stocks,” said Ajit Mishra, SVP Research at Religare Broking.
The Indian rupee broke its two-day winning streak, depreciating 18 paise to close at 90.44 against the US dollar, under pressure from soft regional peers and rebounding commodity prices. “The Indian rupee’s two-day winning streak broke today, driven by weak regional peers and a recovery in commodity prices. Market activity remained subdued as focus shifts to Friday’s RBI rate announcement,” said Dilip Parmar, Research Analyst at HDFC Securities.
In commodities, spot gold rose for a second straight session, rising above $5,050 an ounce after aggressive dip buying following last week’s brutal sell-off. “Spot gold extended gains for the second consecutive session today, rising above $5,050/oz after recovering sharply from lows below $4,500/oz last week,” said Kaynat Chainwala, AVP Commodity Research at Kotak Securities. WTI crude was held above $64 a barrel after a massive inventory drawdown of 11 million barrels reported by the API raised expectations of a similar decline in upcoming EIA data.
Looking ahead, analysts expect the market to be in a consolidation phase with the Nifty’s immediate resistance at the 25,800-25,850 level and support at the 25,600-25,500 level. “After the recent sharp swings, some consolidation would be healthy as long as the Nifty remains in the 25,400-25,500 zone. On the upside, the index could attempt a move towards the 26,000 level followed by a gradual rise to record highs,” Mishra said. Market participants will closely monitor the RBI’s monetary policy decision on Friday and the US jobs report for further guiding signals.
Published on February 4, 2026
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