SENSEX drops over 1,300 points, NIFTY50 below 25,350; here are five things to know

The Indian equity benchmarks nosedived on Tuesday ahead of monthly expiry of National Stock Exchange's (NSE) February futures and option contracts. Selloff in equities so intense that investors' wealth worth ₹4.67 lakh crore was wiped out in Tuesday's session by mid-day, data from BSE showed.

The SENSEX dropped as much as 1,359 points and NIFTY50 index fell below its important psychological level of 25,350 to hit an intraday low of 25,327 dragged down by index heavyweights like Infosys, Bharti Airtel, Tata Consultancy Services, Larsen & Toubro, Eternal and HCL Technologies.

As of 2:00 pm, the SENSEX was down 1,101 points at 82,195 and NIFTY50 index tumbled 298 points to 25,414.

Weak US markets

The benchmarks staged a gap down opening and extended losses taking cues from weak closing of the US markets. US stocks ended sharply lower on Monday after President Donald Trump ramped up his newest tariffs, while investors continued to punish companies that could be losers in the artificial-intelligence revolution.

The S&P 500 index dropped 1%, Dow Jones Industrial Average tumbled 1.66% and tech heavy Nasdaq fell 1.13%.

Pain in IT stocks

Shares of information technology (IT) companies were facing intense selling pressure after latest offering by AI firm Anthropic further raised concerns about the future of traditional IT companies. Anthropic launched new programming capabilities for its Claude Code product which could be used to modernize COBOL, a high-level, programming language developed in 1959 for business, finance and administrative systems. This development sent shares of IBM down 13% in US.

The development also had its ripple effect on its Indian peers. The measure of IT companies on the NSE dropped as much as 4.8% or 1,513 points to hit an intraday low of 30,037.30. The Nifty IT index has plunged nearly 21% over the past month (as of Tuesday, February 24 early trade level), underscoring the sharp correction in Indian IT stocks and how the sector has fallen out of favour with investors.

Global investment bank Jefferies said that AI may structurally change the IT business mix towards consulting/implementation while shrinking managed services. This would not only increase cyclicality but also require a change in talent/operating model – thus adding risks.

The global financial services giant said that despite their 16% fall YTD, stocks still offer higher downside than upside.

Crude oil spikes

Crude oil prices in the international markets moved close to $72 per barrel, for first time in nearly seven months, as market participants assessed risks to supply amid rising tensions between US and Iran.

Rising crude oil price is a big negative for India's macro economic fundamentals as India imports 90% of its crude requirements and surging crude could inflate India's import bill, analysts noted.

US wants Iran to give up its nuclear programme, but Iran has adamantly refused, and denied it is trying to develop an atomic weapon.

Sectoral landscape

Selling pressure was visible across sectors as 12 of 15 major sector gauges compiled by the NSE were trading lower led by the NIFTY IT index's nearly 5% fall. NIFTY Realty, Media, Consumer Durables, Auto and Financial Services indices also fell between 0.2% and 1.8%.

On the flip side, select PSU banking, metal, pharma and oil & gas shares were witnessing buying interest.

Broader markets were also facing selling pressure as NIFTY Midcap 100 index fell 0.9% and NIFTY Smallcap 100 index declined 0.8%.

NIFTY50 gainers and losers

Tech Mahindra was top loser in the NIFTY50 index, the stock dropped 6.2% to ₹1,351. HCL Technologies, Eternal, Infosys, TCS, Bharti Airtel, Wipro, Larsen & Toubro and Trent also fell between 2%-6%.

On the flipside, Hindustan Unilever, Sun Pharma, Power Grid, NTPC and Axis Bank were among the notable gainers in the NIFTY50 index.

The overall market breadth was extremely negative as 2,272 shares were declining while 746 were advancing on the NSE.