Sensex tumbles 558 points on sell-off in IT shares

Market Overview - The benchmark BSE Sensex fell by 558.72 points, or 0.66 percent, closing at 83,674.92, with an intraday low of 83,516.67, down 716.97 points or 0.85 percent [3][6] - The NSE Nifty declined by 146.65 points, or 0.57 percent, ending at 25,807.20 [6] Sector Performance - Technology stocks were the major laggards, with Tech Mahindra, Infosys, and TCS each tumbling nearly 6 percent [6] - The Focussed IT sector slumped by 5.40 percent, while the broader IT sector fell by 5.29 percent [8] Investor Sentiment - Concerns over AI-led disruptions and low expectations of a US Federal Reserve rate cut due to strong US economic data negatively impacted investor sentiment [9][10] - Analysts noted that the IT index's decline was driven by fears of margin compression in service-intensive sectors due to AI advancements [9] Global Context - In global markets, AI is reshaping industries, leading to increased volatility and challenges to traditional outsourcing models [10] - Geopolitical tensions, particularly between the US and Iran, may further influence investor caution in the IT sector [10] Institutional Activity - Foreign institutional investors purchased equities worth Rs 943.81 crore, while domestic institutional investors sold stocks worth Rs 125.36 crore [11]