IT stocks were among the laggards in the Sensex and Nifty drop on Tuesday, a slump of nearly one per cent in early trade that was driven by fears of AI (artificial intelligence)-led disruptions.
The 30-share BSE Sensex tanked 813.13 points, or 0.97 per cent, to 82,481.53 in early deals, according to data cited in a PTI news agency report. The 50-share NSE Nifty declined 230.15 points, or 0.89 per cent to 25,482.85.
Eternal dropped the most from the Sensex pack, declining 3.82 per cent, followed by HCL Technologies, Infosys, Tech Mahindra, Tata Consultancy Services, Bharti Airtel, Bajaj Finance, Bharat Electronics Ltd, Trent, Adani Ports, ITC, and Titan.
TCS, Infosys, HCLTech and Wipro lost 2.5 per cent – 4 per cent, according to a Reuters report.
Why were IT stocks down?
The trigger for drop in Asian stock markets is a report released Sunday by Citrini Research, a New York-based financial services company, which outlined forward-looking scenarios highlighting areas of the global economy potentially vulnerable to AI disruption. Industries such as credit card services and food delivery platforms were identified as being especially exposed to new automation tools.
“Policy response has always lagged economic reality, but lack of a comprehensive plan is now threatening to accelerate a deflationary spiral,” the report says, according to Associated Press.
Further dampening sentiment was an announcement from Anthropic stating that its Claude chatbot can assist in modernizing COBOL – the legacy programming language widely used on IBM (International Business Machines Corp) computers. Following the news, IBM shares dropped more than 13 per cent in New York trading, reflecting investor concerns about competitive and technological shift.
IBM stocks’ 13 per cent plunge on Monday was its biggest single-day percentage loss since October 2000. With the decline, IBM shares fell 27 per cent in February, on track for its biggest one-month slide since at least 1968, according to data compiled by Bloomberg.
Besides, rising crude oil prices and renewed concerns over global trade after US President Donald Trump’s latest tariff remarks also weighed on investors’ sentiment, traders said, as per PTI news agency.
On Monday, the 30-share BSE Sensex climbed 479.95 points to settle at 83,294.66, while the NSE Nifty advanced 141.75 points to close at 25,713.