Indian equity markets ended the week lower after opening on a positive note, with selling pressure in information technology stocks weighing on benchmark indices. Gains triggered by optimism over an interim trade deal between the United States and India were short-lived, as reports related to artificial intelligence increased pressure on the IT sector. On a weekly basis, the Sensex and the Nifty 50 declined by around 1 percent.
Market participants said the primary driver of the decline was selling in IT stocks. Reports linked to artificial intelligence heightened concerns that automation could lead to faster project completion for Indian IT companies, potentially affecting earnings and productivity.
The IT sector recorded the sharpest weakness during the week. The Nifty IT index fell 8.2 percent, marking its worst weekly performance in the past 10 months. The IT sector accounts for approximately 10 percent of the Indian equity market, amplifying its impact on the Nifty and the Sensex. Shares of Infosys, TCS, HCL Tech, Tech Mahindra and Wipro remained under pressure.
So far in 2026, the Nifty IT index has declined about 13.7 percent, exceeding the 12.6 percent fall recorded in 2025. In February, the combined market capitalisation of the 10 leading IT companies fell by around $50 billion, contributing to pressure on the benchmark indices.
Market participants attributed part of the weakness to profit booking following recent gains. In the first week of February, Indian equity markets saw b buying interest driven by a long-awaited India-United States trade agreement. In the week ended February 6, the Sensex and the Nifty rose more than 1.5 percent.
Following the rally, investors sold shares to secure gains, adding to market pressure. Technical indicators suggest that the Nifty remains at a key support level, with potential for stabilisation in the coming weeks.
Beyond IT, the metal sector also recorded weakness during the week, with the metal index declining by about 2 percent. The media and FMCG sectors fell 1 percent and 0.8 percent, respectively. Market participants cited global economic uncertainties and potential changes in interest rates in the United States as factors influencing investor sentiment.
According to analysts, foreign investors sold shares amid global economic uncertainties, while domestic investors engaged in profit booking, contributing to the overall decline.
Analysts said the 25,000 level is currently considered an important support for the Nifty. If this level holds, the market could stabilise. For the Sensex, the 82,000 to 82,400 zone is viewed as a key support area. On the upside, the 25,800 to 26,000 range for the Nifty and the 84,000 to 84,500 range for the Sensex are considered significant resistance levels.
Investors are advised to monitor developments in the IT sector and global economic indicators. Clarity on the impact of artificial intelligence and potential changes in US interest rates could influence market direction in the coming weeks.
