SENSEX, NIFTY50 fall ahead of RBI's policy decision, IT stocks decline on global selloff

The Indian equity benchmarks edged sharply lower on Friday, February 6, ahead of the Reserve Bank of India's monetary policy decision due later in the day.

The SENSEX fell as much as 325 points and NIFTY50 index touched an intraday low of 25,522 dragged down by losses in information technology (IT) shares like Infosys, Tata Consultancy Services, Tech Mahindra and HCL Technologies.

As of 9:46 am, the SENSEX was down 251 points at 83,062 and NIFTY50 index fell 86 points to 25,556.

The Reserve Bank of India’s Monetary Policy Committee (MPC), headed by Governor Sanjay Malhotra, is widely expected to maintain the status quo on interest rates when it announces its bi-monthly monetary policy decision on Friday, February 6.

The policy outcome will come after three days of deliberations, and against the backdrop of a growth-oriented Union Budget and the recently announced India–US trade deal.

Experts note that the Reserve Bank of India has already delivered cumulative repo rate cuts of 125 basis points since February last year, bringing the policy rate down to 5.25%.

Global market update

Asian markets were trading lower on Friday as tech selloff on Wall Street intensified on fears that new AI models may start to hamper profits of software companies.

Hong Kong's Hang Seng declined 1.6%, South Korea's KOSPI dropped 0.9%, Australia's S&P/ASX 200 index plunged 1.76% while Japan's Nikkei advanced 0.45%.

The tech stocks continued to rattle the US markets for the third consecutive session, with NASDAQ closing nearly 1.4% lower on Thursday. The S&P500 and Dow Jones also fell 1.2% each as investors turned cautious over the broader economic sentiment of the country.

Sectoral picture

IT shares were witnessing intense selling pressure amid rout in technology shares across the world as investors turned cautious over fears that new AI models may start to hamper profits of software companies.

The selloff in IT stocks started on Wednesday after Anthropic's latest AI offering raised concerns about the future of technology companies, analysts noted.

Anthropic released new AI plug-ins/extensions for its Claude Cowork agent, which can automate tasks in legal, sales, marketing, compliance and data analysis — areas traditionally serviced by expensive, licensed software companies.

The measure of IT companies on the National Stock Exchange, NIFTY IT index, dropped as much as 2.58% with all 10 stocks in the index trading lower.

NIFTY Pharma, Metal, Auto, FMCG and Healthcare indices also fell between 0.4%-1.1%.

On the flipside, select financial services, private bank and oil & gas shares were witnessing buying interest.

Broader markets were underperforming their larger peers as NIFTY Midcap 100 index fell 0.64% and NIFTY Smallcap 100 index dropped 1.06%.

Among the individual shares, Hitachi Energy India shares surged as much as 14% to hit an intraday high of ₹21,900 after its net profit in December quarter jumped 90% to ₹261 crore.

NIFTY50 gainers and losers

Tech Mahindra was top loser in the NIFTY50 index, the stock fell 2% to ₹1,613. TCS, Max Healthcare, Infosys, Bajaj Auto, Asian Paints, Bharat Electronics, ONGC and Eicher Motors also dropped between 1.35%-1.9%.

On the flipside, Bajaj Finance, Kotak Mahindra Bank, Bharti Airtel, Tata Motors PV, Bajaj Finserv and Power Grid were among the top gainers in the NIFTY50 index.

The overall market breadth was extremely negative as 1,915 shares were declining while 714 were advancing on the NSE.