IT sector rout drags Sensex below 83,000 as AI disruption fears deepen

Market Overview - Equity benchmarks faced significant pressure, with the Sensex down 826.65 points (0.99%) to 82,848.27 and the Nifty falling 264.85 points (1.03%) to 25,542.35 [1] - The broader market decline was influenced by fading expectations of near-term US rate cuts and a 2.03% drop in the Nasdaq, raising concerns about global technology valuations [3] IT Sector Performance - The Nifty IT index dropped 1.79% to 32,568.00, following a steep 4.72% decline the previous day, marking its worst single-day fall in ten months [2] - Major IT companies experienced significant losses, with Coforge down 4.57% to ₹1,356.60, TCS down 2.36% to ₹2,685.10, and Infosys down 2.24% to ₹1,355.00 [2] Market Sentiment and Analysis - Analysts noted that the current AI shift presents unique challenges for Indian IT firms, which have doubled in size since the Cloud migration era, facing incumbency risks [3] - Selling pressure in the IT sector is attributed to concerns over global demand slowdown and uncertainty regarding AI-led disruptions [4] - Some experts argue that AI could compress the software development lifecycle and potentially expand demand for IT services, despite current concerns [5] Broader Market Dynamics - The market breadth was weak, with 2,752 stocks declining compared to 1,256 advancing, and 156 stocks hitting 52-week lows [7] - The Nifty Midcap 100 and Nifty Smallcap 100 indices fell by 1.38% and 1.39%, respectively, indicating a broader market downturn [7]