SENSEX, NIFTY50 trade on a subdued note; IT shares plunge on Anthropic's new AI tool

The Indian equity benchmarks were trading on a flat note on Wednesday, February 4, as steep losses in information technology shares such as Infosys, Tata Consultancy Services, HCL Technologies and Tech Mahindra were offset by buying in Reliance Industries, ICICI Bank, HDFC Bank, Mahindra & Mahindra and Bharti Airtel.

The SENSEX traded in a band of 656 points and NIFTY50 index touched an intraday high of 25,761 and a low of 25,563.

As of 9:27 am, the SENSEX was up 81 points at 83,823 and NIFTY50 index dropped 57 points to 25,785.

Asian markets were trading on a mixed note on Wednesday as selloff in technology shares dragged US benchmarks indices.

Japan's Nikkei fell 0.67%, China's Shanghai Composite advanced 0.25%, Hong Kong's Hang Seng declined 0.45% and South Korea's KOSPI rose 0.74%.

Back home, IT shares came under heavy selling pressure as the measure of IT stocks on the NSE, NIFTY IT index, dropped over 5% as investors reacted sharply to new developments around Anthropic’s new AI products, especially tools that threaten the business models of established software, legal, and data companies, reports suggested.

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.

These tools directly compete with incumbents such as legal research platforms, analytics databases, and professional-services software. That raised fears that AI could displace high-margin, long-term subscription revenue, as per news reports.

All 10 shares in the NIFTY IT index were trading lower led by Persistent Systems' over 6.5% fall. LTI MIndtree, Coforge, Infosys, HCL Technologies, Mphasis and Tata Consultancy Services also dropped between 5%-6.4%.

On the flipside, NIFTY Oil & Gas index was top sectoral gainer, the index advanced over 1.5% led by gains in index heavyweight Reliance Industries. NIFTY Auto, Consumer Durables, Metal and FMCG indices also rose between 0.55%-1.25%.

Broader markets were trading on a mixed note as NIFTY Midcap 100 index was up 0.03% and NIFTY Smallcap 100 index advanced 0.4%.

ONGC was top gainer in the NIFTY50 index, the stock rose 3.56% to ₹266. Coal India, NTPC, Mahindra & Mahindra, Power Grid, ICICI Bank, Reliance Industries and Jio Financial Services also advanced between 1.5%-2.25%.

On the other hand, Infosys, TCS, HCL Technologies, Tech Mahindra, Wipro, Bajaj Finance and IndiGo were among the top losers in the NIFTY50 index.

The overall market breadth was positive as 1,863 shares were advancing while 860 were declining on the NSE.