Both the benchmark indices, the ended the trading day in the red. The Sensex declined 303.67 points and closed at 74,346.17, while the Nifty fell 77.95 points and ended the trading day at 23,405.60. Nifty IT shares declined the most in the trading session with Infosys’ shares falling over 8% and TCS’ shares tumbling over 9% in intra-day trade. The Nifty IT Index ended the trading day sharply lower by 5.57%. Experts believe investors rushed to book profits after the sharp rally primarily on back of artificial intelligence optimism
The has been under pressure for most of this year as investors continue to assess whether AI will generate new revenue streams for software exporters or reduce demand for traditional outsourcing services.
“We expect new opportunities such as legacy modernisation to increase, but do not expect them to compensate for the deflation enough,” Kotak Institutional Equities Analyst Kawaljeet Saluja told Reuters.
Founder & Head of Research at Equinomics Research, G. Chokkalingam told Timesnownews.com, “Renewed attacks in West Asia and renewed AI Disruption worries are causing domestic markets to fall. These concerns are likely to lead to continuity in FII outflows in the short term. Domestic market turnaround depends solely on conflicts in West Asia. If resolution is found out the same will lead to oil price to crash and the same will help in boosting domestic macroeconomic parameters like trade balance, forex reserves , rupee exchange rate and earnings of corporate which use oil or oil derivative as inputs. It would also help on containing inflation. This war cannot continue for a long period. Iran economy is in crisis. US also facing rising inflation, slowing down GDP growth and growing debt. Thus resolution to conflict is very much possible and that will help domestic market to recover significantly.”