Sstock markets ended slightly lower on Thursday as continued weakness in IT shares, concerns over artificial intelligence-led disruption and rising fears of prolonged high US interest rates kept investors cautious. Persistent tensions in West Asia also weighed on sentiment, although buying in select banking and pharmaceutical stocks helped limit losses.
The BSE fell 150.63 points, or 0.20%, to close at 73,832.55, while the NSE Nifty50 slipped 53.35 points, or 0.23%, to settle at 23,161.60.
The benchmarks remained largely range-bound for the second consecutive session as investors assessed the impact of fresh military exchanges between the United States and Iran and the possibility of higher-for-longer interest rates in the US after inflation accelerated to a three-year high of 4.2%.
The United States and Iran exchanged attacks for a second straight day after President Donald Trump warned of further strikes if Tehran did not immediately agree to a peace deal, keeping global markets on edge.
IT stocks remained the biggest drag on the market.
The Nifty IT index fell 1.62%, extending its losing streak to seven consecutive sessions. The index has declined 10.6% during this period.
The selloff was driven by renewed concerns over the impact of AI disruption on traditional IT services companies, especially after new artificial intelligence tools introduced by Anthropic increased concerns around automation.
Higher US inflation also added pressure on the sector. Elevated inflation raises the possibility that the US Federal Reserve may keep interest rates high for longer, which can impact technology spending in the world’s largest economy.
Among Sensex stocks, Infosys was the biggest loser, falling 2.71%, followed by HCL Technologies, which dropped 1.95%. Adani Ports fell 1.91%, Bajaj Finance declined 1.56%, Eternal slipped 1.50%, and Larsen & Toubro lost 1.48%.
TCS declined 0.86%, Tech Mahindra fell 0.67%, while other IT companies also remained under pressure.
Despite weakness in IT shares, banking and pharmaceutical stocks helped the market recover from lower levels.
Mahindra & Mahindra was the biggest Sensex gainer, rising 1.67%. ICICI Bank gained 1.64%, Kotak Mahindra Bank advanced 1.11%, while Sun Pharmaceutical rose 0.65%.
Bharti Airtel climbed 0.38%, Maruti Suzuki gained 0.31%, and Reliance Industries added 0.24%.
According to Vinod Nair, Head of Research at Geojit Investments Limited, the market saw some recovery due to buying in banking and pharma stocks as crude oil prices eased.
“Domestic markets witnessed a modest rebound on dip-buying as oil prices eased, despite the recent US-Iran escalation. However, the recovery proved fleeting, weighed down by an increasingly fragile global backdrop,” he said.
Nair said banking and pharma stocks attracted buying interest because of resilient earnings, favourable RBI measures and a shift towards defensive sectors.
He added that IT stocks remained under pressure due to concerns that strong US inflation could delay rate cuts and keep global financial conditions tight.
The broader market also witnessed selling pressure as investors booked profits after the recent outperformance.
The Nifty Midcap 100 declined 0.81%, while the Nifty Smallcap 100 fell 0.67%.
Among sectors, Nifty Media was the only major gainer, rising 1.78%. Nifty Pharma advanced 0.61% and Nifty Private Bank gained 0.55%.
However, Nifty Consumer Durables fell 1.15%, Nifty FMCG declined 0.89%, Nifty PSU Bank dropped 0.89%, and Nifty Realty lost 0.64%.
India VIX eased 0.12% to 15.61, indicating that volatility remained largely stable.
Going forward, investors will closely track developments in the US-Iran conflict, crude oil prices, US interest rate expectations and the impact of artificial intelligence on global technology companies.
Any signs of easing geopolitical tensions or a softer inflation outlook could support sentiment, while continued weakness in global technology stocks may keep pressure on Indian IT shares.
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