Sensex, Nifty stall after two-day rise as IT shares tumble on AI worries

India’s equity markets ended largely unchanged on Wednesday, halting a two-day upward trend as steep declines in information technology shares offset gains in other sectors.

Market participants exercised restraint following renewed worries about artificial intelligence’s impact on software companies worldwide.

When trading concluded, the Nifty climbed 48.45 points (0.19%) to settle at 25,776, while the Sensex edged up 78.56 points (0.09%) to close at 83,817.69.

The Nifty remained rangebound throughout the session, hovering between 25,680 and 25,820, signaling persistent consolidation patterns.

“Buyers protected the 25,650–25,700 support level, though persistent selling near the 25,800–25,850 resistance zone limited upward movement,” noted market strategists.

Technology stocks faced significant pressure with the Nifty IT index plunging 6%, mirroring substantial losses in US software equities.

The sector’s downturn followed AI firm Anthropic’s introduction of new legal productivity tools, heightening investor anxiety about AI’s disruptive potential for conventional IT services.

Major decliners among Sensex constituents included Infosys, TCS, HCLTech, and Tech Mahindra. Banking institutions like Axis Bank and Kotak Mahindra Bank also finished lower.

Contrasting this weakness, stocks such as Eternal, Trent, NTPC, Power Grid, and Adani Ports emerged as notable gainers.

Broader markets outperformed the benchmarks with the Nifty MidCap index advancing 0.63% and the SmallCap index rising 1.27%.

While pharmaceuticals dipped 0.34%, consumer durable stocks surged 2.6% and oil and gas companies climbed 2%, buoying overall sentiment.

Market observers highlighted that despite the marginal index gains, uncertainty persisted regarding AI’s long-term implications for technology sector profitability.

(With inputs from IANS)