Shares of top IT companies, including Infosys, HCL Technologies, Mphasis, and Persistent Systems, fell between 2–3%. The selloff followed news that Anthropic’s Claude Code AI tool could modernize legacy COBOL systems. With 95% of U.S. ATM transactions still relying on COBOL, investors fear AI-led automation could disrupt traditional IT revenue streams. TCS, Tech Mahindra, and Wipro also slipped around 2%, pushing the Nifty IT index down more than 2% to 30,849.05.
Trump’s Tariff Concerns Shake Markets
Investor sentiment was further rattled by former U.S. President Donald Trump warning of higher tariffs for countries attempting to circumvent a recent Supreme Court ruling. Trump suggested a 15% global tariff under Section 122 of the Trade Act of 1974, intensifying concerns over global trade tensions.
Global Markets and U.S. Tech Selloff
Asian indices struggled following an overnight U.S. selloff, where the S&P 500 fell 1% and Nasdaq Composite dropped 1.1%. MSCI Asia-Pacific ex Japan Index declined 0.2%, while Japan’s Nikkei 225 gained 0.7% post-holiday. Rising geopolitical uncertainty and AI-driven displacement fears weighed on investor sentiment worldwide.
Weekly Derivatives Expiry and Volatility
The weekly expiry of Nifty 50 derivatives added to market volatility, as traders squared off positions and engaged in fresh hedging. Option writers attempting to anchor prices at key strike levels contributed to sharper intraday swings, magnifying selling pressure in some stocks.
Weak Rupee and Economic Concerns
The Indian Rupee depreciated 0.07% to 90.95 against the U.S. dollar. A weaker rupee may trigger foreign capital outflows and increase import costs, especially for crude oil, adding pressure on corporate margins and earnings expectations.
Geopolitical Tensions: U.S. and Iran
Adding to market anxiety, Trump hinted at a potential military strike if Iran fails to reach a new deal in Geneva. Iran’s Ministry of Foreign Affairs warned that any attack would be considered an act of aggression, heightening global risk concerns.