Indian Stock Market Plunges: Sensex Drops 755 Points, Nifty Below 25600

The Indian equity benchmarks, Sensex and Nifty 50, witnessed a significant downturn during the opening session on Friday. 00. According to market reports, this sharp correction was triggered by a broader sell-off in global equities and specific weakness in the domestic information technology sector. The market breadth remained weak in the early hours, with a majority of stocks trading in the red as panic selling gripped Dalal Street.

Heavy Sell-off in the IT Sector

The primary drag on the indices was the Information Technology (IT) sector. Major IT stocks, including Infosys, Tata Consultancy Services (TCS), HCL Technologies, and Wipro, faced intense selling pressure. This decline follows a sharp drop in US tech stocks, particularly those linked to Artificial Intelligence (AI), while concerns regarding an 'Anthropic shock' and a slowdown in AI-related capital expenditure have weighed heavily on investor sentiment. As the Indian IT sector derives a substantial portion of its revenue from the US and European markets, the volatility in the Nasdaq has a direct correlation with the performance of these domestic tech giants.

Impact of Weak Cues from US Markets

00% in the previous session. The global rally observed over the past year was largely driven by the AI theme, and any cooling off in this segment is expected to impact emerging markets like India. While the current decline is significant, officials note that the long-term impact of the AI trade slowdown on the Indian market remains to be seen. The weakness in US markets has led to a cautious approach among global institutional investors, resulting in capital outflows from riskier assets in the short term.

Corporate Developments and Key Stocks in Focus

Despite the broader market decline, several individual stocks remained in the news due to corporate developments. 00 crore, which drew some investor attention. AU Small Finance Bank received approval from the Reserve Bank of India (RBI) for the reappointment of its Managing Director and CEO. On top of that, GAIL India is in focus following discussions regarding the appointment of a new chairman. Other stocks being monitored by market participants include Coal India, ONGC, Hindalco, Indraprastha Gas, Biocon, and Indian Hotels.

Sectoral Performance and Market Breadth

Beyond the IT sector, other indices also showed signs of weakness. The banking and financial services sectors opened lower, contributing to the overall decline in the Sensex. While the auto sector showed some resilience, the negative sentiment across the board limited any potential gains. Stocks like Muthoot Finance, PI Industries, IRCTC, and Petronet LNG witnessed volatile trading sessions. Market data indicates that the advance-decline ratio was heavily skewed towards the decliners, reflecting the widespread nature of the sell-off. The volatility index has also seen a spike, indicating increased uncertainty in the near-term market trajectory.