Indian equities faced a brutal session on Tuesday, capped by a 1,068-point Sensex drop to 82,225.92 amid panic selling in technology shares. The broader Nifty ended 288 points lower at 25,424.65, down 1.12%. The catalyst? Anthropic’s latest AI advancement, which threatens to upend the lucrative IT services model.
The San Francisco-based AI firm unveiled a Claude tool capable of upgrading outdated COBOL systems to modern standards. This development raised alarms that outsourcing demand for code migration and maintenance—key revenue streams for firms like TCS and Infosys—could evaporate. Nifty IT nosedived 4.74%, dwarfing losses elsewhere.
Other sectors followed suit into negative territory: Realty -2.54%, Services -1.46%, Media -1.31%, Consumption -0.86%, and Infrastructure -0.72%. Bright spots included Metal (+0.93%), Energy (+0.78%), Commodities (+0.70%), PSE (+0.56%), and PSU Banks (+0.29%).
Largecaps bore the brunt, but mid and smallcaps held up better. Nifty Midcap 100 slipped 0.32% to 59,066.35, and Smallcap 100 declined 0.55% to 16,958.65.
Sensex gainers featured NTPC, HUL, Tata Steel, Power Grid, Titan, Axis Bank, and Sun Pharma, providing some counterbalance. Heavyweights like Tech Mahindra, HCL Tech, IndiGo, Infosys, TCS, L&T, Trent, Airtel, HDFC Bank, and BEL dragged the index down.
According to Sudeep Shah of SBI Securities, Nifty gapped lower at open, plumbed 25,328 intraday, and settled at 25,425. Key support at 25,370-25,350; breach could see 25,150/24,950. Upside hurdles at 25,600-25,650.
As AI tools encroach on legacy tech domains, the $250 billion Indian IT sector grapples with existential questions. This selloff may signal the start of a broader reassessment, with eyes on Federal Reserve signals and Q4 results for direction.