Indian equities kicked off the day with slim advances, buoyed by gains in auto, metals, and energy sectors. Yet, the IT pack’s steep slide, sparked by Anthropic’s cloud AI innovation, kept benchmarks from broader surges.
The company’s rollout of a specialized legal tool for its chatbot has heightened fears of fiercer AI rivalry and eroding profit margins. Echoing Wall Street’s bearish tech sentiment, Indian IT shares opened lower, capping market enthusiasm.
By 9:25 AM, Sensex was up 44 points (0.05%) at 83,783, and Nifty rose 51 points (0.20%) to 25,778. Midcaps and smallcaps mirrored the tepid mood, edging higher by 0.04% and 0.01% respectively.
Sector-wise, Auto, Metal, Consumer Durables, and Oil & Gas led the charge with gains of 1.12%, 1.38%, 1.05%, and 1.77%. IT plunged 5.39%, while Realty shed 0.58%; the rest stayed green.
Traders eye Nifty support at 25,550-25,600 and resistance around 25,850-25,900. The US-India trade momentum might stall, analysts say, pressured by US IT weakness that could drag Indian indices lower.
As a vital outsourcing destination, India’s IT sector felt the heat from Anthropic’s move, which saw US software stocks crater up to 25%.
High valuations persist without strong fundamentals, dimming prospects for prolonged uptrends. No rate tweaks expected from RBI’s February 6 policy huddle.
FII short covering drove the mild bounce, with export-oriented plays like textiles, jewelry, and seafood processing in focus for potential follow-through.
Overnight, Asia wavered: Shanghai unchanged, Shenzhen -0.88%, Nikkei -0.6%, Hang Seng -0.73%, Kospi +0.72%. US indices dipped, Nasdaq -1.43%, S&P -0.84%, Dow -0.34%.
FIIs net bought ₹5,236 crore and DIIs ₹1,014 crore on February 3, providing a buffer against tech-led pressures.