Indian Stock Markets Continue Bullish Trend with Tech Sector Under Pressure
The Indian equity markets maintained their upward trajectory for the third consecutive trading session on Wednesday, February 04, though the gains remained modest due to substantial pressure on technology stocks. This session followed Tuesday's remarkable rally, which had marked the most significant intraday surge in over nine months, largely fueled by optimism surrounding the India-US trade deal negotiations.
Benchmark Indices Register Marginal Advances
After trading within a narrow range throughout the day, the benchmark indices closed with slight increases. The Nifty 50 index edged up by 0.22 percent to settle at 25,758 points, while the S&P BSE Sensex gained 0.12 percent to finish at 83,841 points. This continuation of the bull run reflects sustained investor confidence in the broader economic landscape, despite sector-specific challenges.
Broader Markets Outperform with Strong Gains
In contrast to the modest performance of the main indices, the broader market segments demonstrated remarkable strength. The Nifty Midcap 100 index surged by 0.6 percent, and the Nifty Smallcap 100 index advanced by an impressive 1.2 percent. This outperformance indicates robust buying interest in mid-sized and smaller companies, suggesting that investors are diversifying their portfolios beyond large-cap stocks.
Technology Sector Faces Severe Sell-Off
The technology sector experienced heavy selling pressure, with prominent blue-chip stocks declining by up to 8 percent. This downturn was triggered by news that US-based artificial intelligence company Anthropic launched new plug-ins for its Claude Cowork agent. These plug-ins are designed to automate tasks across legal, sales, marketing, and data analysis domains—areas traditionally dominated by software firms and IT service providers.
The Nifty IT index, which tracks the performance of major technology companies, plummeted by 6 percent, recording its worst intraday decline in four years. This made it the poorest-performing sectoral index for the day. Notably, this is not the first time domestic tech stocks have faced such pressure; during the same period last year, they witnessed significant selling following China's introduction of the low-cost AI model DeepSeek, which led to a 12.6 percent drop in the index in February.
Other Sectoral Indices Show Positive Momentum
While the technology sector struggled, all other major sectoral indices closed in positive territory, highlighting the diversified nature of the market rally. The Nifty Consumer Durables index led the gains with a substantial increase of 2.66 percent. Additionally, the Nifty Oil & Gas index rose by 2 percent, the Nifty Metal index advanced by 1.27 percent, and the Nifty Auto index climbed by 1.18 percent.
Key Stocks Among Top Losers
Several prominent companies featured among the day's top losers, reflecting the broader weakness in the technology and related sectors. Major losers included:
- Infosys
- TCS (Tata Consultancy Services)
- Coforge
- HAL (Hindustan Aeronautics Limited)
- HCL Technologies
- Wipro
- Vardhman Textiles
These stocks faced significant downward pressure, contributing to the overall decline in the technology and industrial segments. The inclusion of Vardhman Textiles among the losers suggests that the sell-off may have extended beyond pure tech stocks to include other sectors experiencing specific challenges.
The market dynamics on February 04 underscore the ongoing volatility in the technology sector, driven by global competitive pressures and innovation trends. Meanwhile, the strength in broader indices and other sectors points to resilient investor sentiment and opportunities in diverse market segments. As the bull run continues, market participants will closely monitor sectoral rotations and external developments that could influence future trading sessions.
