'Anthropic shock': Sensex, Nifty drop 1%; investors lose over Rs 7.2 lakh crore in early trade

Indian equity benchmarks extended their sharp fall in Friday’s opening trade, weighed down by profit booking and heavy selling in information technology (IT) stocks. The 30-share BSE Sensex pack slumped over 800 points or 1 per cent to trade below the 82,850 level, while the NSE Nifty50 index dropped more than 1 per cent to slip below 25,550.

On NSE, all sectoral indices ended in the red, with Nifty IT emerging as the worst performer, tumbling 4.58 per cent. The fear gauge India VIX climbed 3.73 per cent to 12.16.

The sharp decline eroded investor wealth significantly, with nearly Rs 7.2 lakh crore wiped out from the BSE’s total market capitalisation (m-cap) during early deals.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said: “For the Indian market, this correction in AI stocks is a positive, because last year’s global rally was primarily an AI trade in which India, an AI laggard, couldn’t participate. So the unwinding of the AI trade, If it persists, is a positive from the Indian perspective. However, what is rattling the Indian market now is the massive sell-off in IT stocks, which is the second largest profit pool of India Inc. The real impact of the ‘Anthropic shock’ on the IT sector is yet to be ascertained. Panic selling in IT stocks at this stage may not be a good idea. Investors may wait and watch for the dust to settle.”

Echoing a cautious stance, Hitesh Tailor, Research Analyst at Choice Equity Broking, said: “Amid persistent global uncertainties and heightened market volatility, traders are advised to maintain a disciplined and selective approach, focusing on fundamentally strong stocks on declines.”

Rs 7.2 lakh crore investor wealth lost

Investor wealth, as measured by the BSE m-cap, declined by Rs 7.29 lakh crore to Rs 465.19 lakh crore from Rs 472.48 lakh crore in the previous session.

Frontline stocks including Infosys Ltd, Tata Consultancy Services (TCS), Reliance Industries Ltd (RIL), HCL Technologies, Eternal, Hindustan Unilever Ltd (HUL), HDFC Bank and Tech Mahindra were among the major contributors to the market’s fall.

2,473 stocks in the red

Market breadth remained firmly negative. Of the 3,460 stocks traded on the BSE, 2,473 declined, while 850 advanced and 137 remained unchanged.

FII-DII data

Meanwhile, foreign institutional investors (FIIs) continued their buying streak for the fifth consecutive session during the previous session, purchasing equities worth Rs 108 crore, while domestic institutional investors (DIIs) also turned net buyers, investing over Rs 276 crore in equities.