Stock Market Highlights: Sensex closes 558 points lower at 83,674, Nifty 50 slides 146 points to 25,807

Sharp Decline in Key Indices

The BSE Sensex closed 558 points lower at 83,674, while the Nifty 50 slid 146 points to end at 25,807, marking a turbulent session for Indian equities. This downturn came after a promising start to the week, but investors quickly turned cautious as selling pressure mounted throughout the day. The benchmarks opened marginally lower but soon accelerated losses, reflecting broader market jitters. By midday, both indices had erased early gains and dipped into negative territory, with the slide intensifying in the afternoon. This performance wiped out substantial gains from recent rallies, leaving traders and investors reassessing their positions. The drop highlights the fragility of market sentiment in the face of external pressures, underscoring how quickly optimism can evaporate.

Throughout the trading day, volatility was evident as the Sensex touched intraday lows before a slight recovery attempt that fell short. The Nifty mirrored this pattern, struggling to hold key support levels. Market breadth was weak, with far more decliners than advancers, signaling widespread pessimism. Sectors that had driven prior uptrends now bore the brunt of the correction, pulling the overall indices down. This session serves as a reminder of the interconnected nature of global and domestic markets, where overseas developments can swiftly influence local trading floors.

IT and Metals Lead the Sell-Off

Information technology stocks were the biggest drag, with major players like Infosys, TCS, HCLTech, Wipro, and Tech Mahindra posting declines of 4-6%. The Nifty IT index tumbled more than 4% in a single day, extending a two-session loss nearing 10%. This rout stemmed from growing worries over artificial intelligence disrupting traditional outsourcing models, as new AI tools target enterprise needs like legal workflows. Investors fear these innovations could erode demand for Indian IT services, prompting heavy profit booking after recent highs. Metal stocks also weakened significantly, with the Nifty Metal index down around 2%, led by sharp falls in companies like Hindalco. Other laggards included Hindustan Unilever and Adani Enterprises, showing the sell-off's broad reach beyond just tech.

Indian equities faced significant selling pressure today, driven by weak global cues and sharp declines in heavyweights like IT and metals. This correction follows weaker-than-expected earnings and AI disruption concerns, but markets could stabilize if supports hold, said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services.

The combination of these sectoral pressures amplified the overall market fall, as these segments carry substantial weight in the indices. Even defensive names couldn't provide a buffer, highlighting a risk-off environment where investors shunned equities in favor of safety.

Global Cues and Investor Flows Fuel the Pressure

Weakness abroad played a pivotal role, with US markets closing sharply lower the previous day—Dow Jones down 1.34%, S&P 500 off 1.57%, and Nasdaq dropping 2.03%. Technology heavyweights like Apple contributed to the slide, raising fears of profitability squeezes. Asian peers followed suit, with Japan's Nikkei falling 1.69%, South Korea's KOSPI down 0.5%, and Australia's ASX weaker by 1.3%. A strengthening US dollar at 96.93 and a softer rupee added headwinds for Indian exports and foreign investors. Foreign institutional investors (FIIs) sold equities worth over Rs 7,395 crore, outpacing domestic buying of Rs 5,554 crore. This net outflow exacerbated the decline, eroding BSE-listed firms' market cap by more than Rs 7 lakh crore to around Rs 465 lakh crore.

Profit booking at elevated valuations also factored in, as indices had hit record highs recently. Uncertainty around earnings visibility, interest rate paths, and geopolitical tensions kept participants sidelined. The session's volatility points to heightened caution, with eyes now on upcoming economic data and corporate results for direction.

In summary, Friday's market action was dominated by a tech-led sell-off amid AI fears, global weakness, and FII selling, resulting in substantial losses for Sensex and Nifty. While this could signal a short-term correction, sustained supports and positive triggers might aid recovery, though investors remain watchful.