The Sudden Market Reversal
The Indian stock market has faced extreme volatility in recent trading sessions. After witnessing a brief rebound where the BSE Sensex rose by 480 points and the Nifty 50 touched 25,713, the markets abruptly reversed course. In a devastating follow-up session, the Sensex plunged by 1,068 points (1.28%) to close at 82,225, while the Nifty 50 dropped 288 points to settle at 25,424, abruptly ending a brief two-day winning streak.
IT Sector Leads the Decline
The massive selloff was broad-based but primarily spearheaded by the Information Technology (IT) sector. The Nifty IT index suffered a catastrophic 4.74% drop, hitting a 30-month low. Over the past month, the IT sector index has shed over 20%. Blue-chip tech giants, including Tech Mahindra, Infosys, TCS, and Wipro, all suffered heavy losses during the rout.
Underlying Causes for the Selloff
Analysts attribute the severe turbulence in the IT sector to deep anxieties surrounding artificial intelligence (AI) disruptions and renewed uncertainties regarding strict U.S. tariff policies that could negatively impact Indian outsourcing firms. The single session’s selloff was immense, with an estimated ₹2.18 lakh crore in investor wealth wiped out across the exchange, as 3,116 stocks declined amidst overwhelmingly negative market breadth.
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