A flicker of positivity lit up Indian stock markets early Wednesday, with most sectors posting gains. But IT stocks’ dramatic downturn, triggered by Anthropic’s AI tool debut, restrained the benchmarks’ progress.
Anthropic’s new legal-focused feature for its cloud AI chatbot underscores escalating competition and margin squeezes in AI development. Indian IT firms, tracking US peers’ woes, bore the brunt of this sentiment shift.
Sensex added 44 points or 0.05% to hover at 83,783, as Nifty gained 51 points or 0.20% reaching 25,778 by 9:25 AM. Nifty Midcap 100 rose 0.04%, Smallcap 100 0.01%.
Positive performers dominated: Nifty Auto +1.12%, Metals +1.38%, Consumer Durables +1.05%, Oil & Gas +1.77%. IT dived 5.39%, Realty -0.58%.
Experts highlight Nifty’s key support zone at 25,550-25,600, resistance at 25,850-25,900. Trade deal-fueled rally sustainability in doubt, with Tuesday’s US IT rout poised to weigh on local indices.
India’s role as a software outsourcing giant amplifies vulnerability to such global shocks; Anthropic news slashed US software shares by 25%.
Sector valuations look frothy sans fundamental anchors, curbing upside potential. RBI’s February 6 meet expected to hold rates steady.
The session’s gains stemmed primarily from FII short-covering. Watch for momentum in US-export beneficiaries: textiles, gems-jewelry, marine products.
Asia presented a split picture—Shanghai flat, Shenzhen -0.88%, Nikkei -0.6%, Hang Seng -0.73%, Kospi +0.72%. Prior US session: Nasdaq -1.43%, S&P 500 -0.84%, Dow -0.34%.
February 3 flows: FII equity buys ₹5,236 crore, DII ₹1,014 crore, bolstering resilience.