Mumbai, February 4: Indian stock markets opened with modest gains on Wednesday, with all sectors showing an uptick. However, the rise was limited due to a decline in IT shares.
Following Anthropic’s announcement of a legal tool for its cloud AI chatbot, Indian IT stocks faced downward pressure due to increasing competition in AI and shrinking margins, reflecting negative signals from Wall Street.
By 9:25 AM, the Sensex rose by 44 points or 0.05% to reach 83,783, while the Nifty closed up by 51 points or 0.20% at 25,778.
The main broad-cap index also saw slight gains, with the Nifty Midcap 100 increasing by 0.04% and the Nifty Smallcap 100 by 0.01%.
All major sectoral indices, except for IT and Realty, were in the green, with declines of 5.39% and 0.58% respectively. Nifty Auto, Metal, Consumer Durables, and Oil & Gas emerged as the top gainers, rising by 1.12%, 1.38%, 1.05%, and 1.77% respectively.
Market experts indicated that immediate support for the Nifty lies in the 25,550-25,600 range, while resistance is expected at 25,850–25,900.
Analysts predict that obstacles may hinder the rally initiated by the US-India trade deal, particularly following a sell-off in US IT stocks on Tuesday, which could impact the Indian IT index.
India serves as a significant software service provider for many US companies. Following the new Anthropic AI launch, software shares on Wall Street experienced declines of up to 25%.
Experts noted that valuations remain high across most sectors, providing no fundamental support for sustained bullish trends. The upcoming monetary policy meeting on February 6 is expected to maintain current rates.
The surge observed on Thursday was primarily attributed to FII short covering. Sectors such as textiles, gems and jewelry, and marine processing, which are expected to benefit from exports to the US, may see further price action.
In Asian markets, China’s Shanghai index remained flat, while Shenzhen fell by 0.88%. Japan’s Nikkei dropped by 0.6%, and Hong Kong’s Hang Seng index decreased by 0.73%. South Korea’s KOSPI, however, rose by 0.72%.
In the previous trading session, US markets mostly closed in the green, although the Nasdaq fell by 1.43%. The S&P 500 and Dow Jones saw declines of 0.84% and 0.34%, respectively.
On February 3, foreign institutional investors purchased equity shares worth ₹5,236 crores, while domestic institutional investors bought shares worth ₹1,014 crores.
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