Sensex falls 400 pts from day's high, Nifty below 25,650: IT sell-off among key factors behind market decline

Sensex falls 400 pts from day's high, Nifty below 25,650: IT sell-off among key factors behind market decline

• Sensex down 256 points, Nifty below 25,650 amid IT sell-off
• IT stocks like Infosys, Tech Mahindra fell 2.5%-3%
• Weak global cues and profit booking hit market sentiment

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Benchmark indices Sensex and Nifty were trading at day's low on February 18 amid sell-off in IT stocks. Sensex fell over 400 pts from day's high while Nifty was trading below the 25,650-mark.

At 10:28 am, the Sensex was down 256.77 points or 0.31% at 83,194.19, and the Nifty was down 75.8 points or 0.29% at 25,649.60. About 1,852 shares advanced, 1,595 shares declined, and 152 shares were unchanged.

Tata Steel and ITC were the top gainers in the Nifty 50 index, up nearly 2% each. Shares of Hindalco Industries, JSW Steel, and Bharat Electronics rose nearly 1%. State Bank of India, Bajaj Auto, and Bajaj Finserv were up nearly 1% each.

In contrast, information technology major Infosys was the worst-hit stock in the index, down nearly 3%. Shares of its peers Tech Mahindra, Wipro, HCL Technologies, and Tata Consultancy Services fell around 2% each. Adani Enterprises and Adani Ports and Special Economic Zone were down around 1% each.

1. IT sell-off

IT stocks saw profit booking on February 18 after two-day rise with Persistent Systems, Infosys, Tech Mahindra leading the losses by falling 2.5%-3%. This, as worries about the artificial intelligence sector persisted even with the Infosys-Anthropic collaboration helping negate some fears in the previous session.

IT index fell 2.4%, pulling back from a 1% rise in the previous session.

All 10 constituents of the IT index declined, with Infosys down 3%, giving away the previous session's gains.

Despite Infosys highlighting AI-first services opportunities worth $300 billion-$400 billion, "most enterprises remain structurally unprepared to adopt AI at scale," said Aditya Chandrasekar and Heenal Gada, analysts at UBS.

"The gap between AI's potential and enterprise readiness remains wide."

"While the overall risk-reward in Indian markets is favourable due to improving earnings trajectory, US trade deal and reasonable valuations, a potential slowdown in IT services/global capability centres could impact jobs, wage growth and consumption," said Surendra Goyal and Vijit Jain, analysts at Citi Research.

2. Technical level

25,750 continues to be a level that Nifty has to cross decisively, said an analyst.

"While the swing higher from the 25,620-570 region unfolded on expected lines, it was disappointing to see 25,750 continuing to pose a challenge. While we had acknowledged the significance of this region yesterday as well, our continued hope is towards a push beyond the same, eying 25,900. However oscillators point to an easing of momentum, which may lead to fluctuations on either side of 25,707 initially," said Anand James, Chief Market Strategist, Geojit Investments Limited.

Analysts expect further consolidation in the benchmarks in the absence of key triggers.

3. Weak global cues and risk-off sentiment

Muted-to-negative signals from Asian markets, US futures, and prior Nasdaq weakness (tech-heavy selloff) are spilling over. Global investors remain cautious amid uncertainties like potential US trade/tariff policies, bond yields, and broader tech sector concerns.