Market Alert: The ‘AI Rotation’ Has Begun

Global and domestic markets are reeling under a dual shock today as the Sensex plunged over 1,000 points and the Nifty slipped below 25,500. According to reporting from major financial news agencies, the crash is primarily driven by a massive selloff in the IT sector following Anthropic’s release of an AI tool capable of automating COBOL coding—a core revenue stream for Indian tech giants. This structural fear, combined with renewed global tariff threats from the US, has wiped out approximately ₹5 lakh crore in investor wealth in a single session.

---

The ‘Claude Code’ Shockwave: Why IT Stocks Are Bleeding

The sharpest drag on the market today is the Nifty IT index, which has crashed nearly 4% to hit a 52-week low. Sources indicate that the trigger was an announcement by AI firm Anthropic regarding its new “Claude Code” tool.

• The Threat: The tool can reportedly modernize legacy systems built on COBOL (Common Business-Oriented Language). Since an estimated 95% of US ATM transactions and many banking systems still rely on COBOL, Indian IT firms have historically earned billions maintaining this code.
• Market Reaction: Investors fear this AI advancement will displace a reliable “cash cow” for Indian services. Consequently, heavyweights like Infosys, TCS, and HCL Tech have seen stock values erode by 2-6% in intraday trade.

Global Headwinds: The Trump Tariff Reset

Beyond technology, geopolitical friction is weighing heavily on sentiment. According to international reporting, US President Donald Trump has threatened a new 15% universal global import levy after the US Supreme Court struck down his previous reciprocal tariff plan.

• Trade War 2.0: The European Union has paused trade deals in response, creating uncertainty for global commerce.
• US-Iran Tensions: Rising geopolitical instability in the Middle East is further dampening risk appetite, pushing investors toward safe-haven assets and away from emerging markets like India.

Key Data Points: The Damage Report

• Sensex: Plunged over 900 points, trading near 82,150 levels.
• Nifty 50: Slipped below the crucial 25,500 support zone.
• Investor Wealth: ~₹5 lakh crore wiped out in early trading.
• Top Losers: Tech Mahindra (-6%), HCL Tech (-6%), Infosys (-4.5%).
• Specific Stock News: IDFC First Bank shares remain volatile after falling 16% yesterday due to a reported ₹590 crore fraud case.

---

Strategic Outlook: Where is the Opportunity?

While the IT sector faces a structural repricing, analysts suggest this is a sector-specific rotation rather than a systemic economic failure.

Sector Watch

• Avoid: Legacy IT service providers heavily exposed to maintenance contracts until the AI impact is priced in.
• Watch: Banking and Capital Goods sectors, which foreign institutional investors (FIIs) have continued to buy recently, driven by India’s robust domestic macroeconomics.

---

FAQ: Market Crash Explained

Q: Should I sell my IT stocks now?
A: Analysts advise caution. While the immediate sentiment is negative due to AI disruption fears, panic selling is rarely a good strategy. It may be better to wait for the volatility to settle or rotate into sectors like banking or manufacturing.

Q: Is the market crash over?
A: Volatility is expected to continue this week. The market is waiting for clarity on the implementation of new US tariffs and further developments in the US-Iran geopolitical situation.

Q: Why are bank stocks safer right now?
A: Unlike IT, which is facing a technological existential threat, Indian banks are benefiting from credit growth and regulatory clarity, making them a preferred pick for domestic and foreign investors.

🛍️ Trending Deal: Shop the latest Technical Analysis Books on Amazon
As an Amazon Associate, I earn from qualifying purchases.

Tags: Sensex Crash, Nifty Prediction, AI Investing