Friday the 13th effect? D-St investors suffer Rs 7 lakh crore shock as Sensex sinks over 1,000 points

Benchmark indices Sensex and Nifty ended over a 1% lower on Friday, extending losses for a second straight session as a deepening selloff in IT stocks rattled investor sentiment amid mounting fears of AI-led disruption. The slide also came on Friday the 13th — a date long viewed as unlucky in the West.

Heavyweights HUL, Eternal, Tata Steel, Titan, Adani Ports, and Reliance were the major laggards, declining up to 4.5%. From the IT pack, Infosys, TCS, HCLTech, and Wipro emerged as key laggards, albeit ending sharply off lows. The steep decline eroded about Rs 7.4 lakh crore in investor wealth, pulling total BSE market capitalisation down to around Rs 465 lakh crore.

The BSE Sensex tumbled 1,048 points, lower by 1.25% to end the day at 82,627, while the Nifty 50 tanked 336 points, slipping below the 25,500 level to end at 25,471.


Here are the major reasons why bears have taken over Dalal Street:

1.) IT Selloff

The sell-off in IT stocks deepened for a second straight session after ADRs of Infosys and Wipro plunged nearly 10% overnight. In Friday’s trade, the Nifty IT index slumped more than 1.5%, sharply off highs as it plunged 4.5% in the morning. Heavyweights including TCS, Infosys, Wipro, Tech Mahindra, HCLTech and Mphasis also declined up to 2.5%, reflecting broad-based weakness across the sector.

Bearish sentiment intensified after US-based AI startup Anthropic unveiled a new enterprise-focused tool aimed at corporate legal teams. The company — known for its Claude chatbot — said the platform can automate a range of functions such as contract reviews, non-disclosure agreement triage, compliance workflows, legal brief preparation and standardised responses, raising concerns over the long-term demand outlook for traditional IT services.

“Tech stocks, reeling under the Anthropic shock, are unlikely to recover soon,” warned V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited. He added that Indian IT may continue to face pressure in the near term, while a rotation of capital toward stronger-performing sectors could support stocks outside the technology space.

2.) Weak global equity markets

Wall Street ended sharply lower on Thursday, led by a steep selloff in technology stocks as investors grew increasingly concerned about the disruptive impact of artificial intelligence on earnings visibility and sector margins.

The tech-heavy Nasdaq tumbled about 2%, while broader markets also came under pressure as investors assessed fresh labour market data from the United States and positioned ahead of the closely watched January inflation report. The Dow Jones Industrial Average fell 669.42 points, or 1.34%, to 49,451.98, the S&P 500 declined 108.71 points, or 1.57%, to 6,832.76, and the Nasdaq Composite dropped 469.32 points, or 2.03%, to 22,597.15.

Asian markets pulled back from recent record highs on Friday as mounting concerns over shrinking margins in the technology sector. MSCI’s broadest Asia-Pacific index outside Japan, compiled by MSCI Inc., fell over 1%, trimming weekly gains to 3.7%. Japan’s Nikkei dropped 1.21%, while Hong Kong’s Hang Seng index slid 1.7%, reflecting broad-based caution across regional markets.

European shares traded mixed on Friday after fresh AI-driven concerns sparked another overnight sell-off on Wall Street, dampening investor sentiment across global markets. The pan-European STOXX Europe 600 hovered around the flatline at 8:50 a.m. in London (3:50 a.m. ET), with most sectors and major regional bourses drifting in negative territory as caution prevailed.

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3.) Dollar strength, weak rupee

Rupee closed at 90.64 per U.S. dollar, little changed from its previous close of 90.59. A strengthening U.S. dollar, which has risen for a third straight session to 96.95 is generally negative for equities as it can trigger foreign fund outflows from emerging markets like India toward safer assets in the United States.

4.) Weak technical set up

Rupak De, Senior Technical Analyst at LKP Securities, said the Nifty opened gap-down, reflecting early weakness in IT stocks amid negative cues from U.S. markets, and ended the session significantly lower. India VIX also climbed back above its 200-day moving average, signalling a rise in market anxiety.

From a technical perspective, the outlook has turned cautious, with the index slipping below its 20-day moving average for the first time in several sessions and breaching the 38.2% Fibonacci retracement of the prior upmove from 24,571 to 26,341. With Nifty closing below the crucial 25,500 support level, the near-term bias appears weak, and the index could drift toward the 25,000 mark in the short term. On the upside, immediate resistance is seen around 25,800.

5.) Geopolitical tensions linger

Rising tensions in the Middle East have kept markets on edge after US President Donald Trump warned of possible action against Iran if a nuclear agreement is not reached, even as diplomatic negotiations continue. Adding to uncertainty, Trump said he is considering deploying a second aircraft carrier to the region as Washington and Tehran prepare to resume negotiations. Earlier this week, he cautioned that Iran could face “something very tough” if it fails to meet US demands. Tehran has signalled a willingness to place limits on its programme in exchange for sanctions relief, while rejecting broader demands beyond the nuclear issue.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)