Artificial intelligence could soon handle work that has employed thousands of software engineers for decades.
On a Tuesday that began with tremors from Wall Street and ended with Rs 4.6 lakh crore in erased wealth, India's markets became a mirror for the anxieties of a world caught between technological disruption and geopolitical uncertainty. The Nifty50 and BSE Sensex fell sharply as an AI tool threatened the livelihoods of software engineers, and a US president's tariff warnings reminded investors that the rules of global trade remain unwritten. These are not merely numbers declining on a screen — they are the visible expression of a civilization renegotiating the terms of work, commerce, and power all at once.
- Rs 4.6 lakh crore in investor wealth vanished in a single session as the Nifty50 and Sensex posted their steepest single-day losses in weeks, rattling portfolios across the country.
- Anthropic's announcement that its Claude Code tool could automate COBOL modernization sent Indian IT giants — Infosys, TCS, Wipro, HCL — tumbling more than 2%, with IBM crashing 13% overnight in the US.
- President Trump's threat to impose a 15% universal tariff after a Supreme Court ruling invalidated his earlier tariff authority froze an EU-US deal and injected fresh uncertainty into global trade flows.
- The rupee slipped, Asian indices wavered, and geopolitical tension over a potential US military strike on Iran added yet another layer of dread to an already fragile market mood.
- A counterforce is quietly building: Foreign Institutional Investors have been net buyers in ten of the last seventeen sessions, drawn by improving Indian corporate earnings and strong macroeconomic fundamentals.
- Markets now watch Trump's State of the Union address and tariff implementation strategy as the next pivot point — the outcome will determine whether fear or fundamentals write the next chapter.
Tuesday's session on Indian markets opened into a storm that had been gathering overnight across global exchanges. By the close, the Nifty50 had lost 288 points and the BSE Sensex had shed 1,069 — a combined blow that wiped out roughly Rs 4.6 lakh crore in market capitalization, pulling the total down to nearly Rs 464 lakh crore.
The sharpest pain was felt in the IT sector. Anthropic's announcement that its Claude Code tool could automate the modernization of COBOL-based legacy systems — the programming backbone of global banking and ATM infrastructure — struck at the heart of what Indian software firms have long been paid to do. Infosys fell nearly 3%, while HCL Technologies, Mphasis, Persistent Systems, TCS, Tech Mahindra, and Wipro each declined around 2%. The Nifty IT index closed more than 2% lower. In the US the night before, IBM had plunged 13%.
The sell-off had more than one cause. President Trump's warning on Truth Social that nations attempting to circumvent a Supreme Court ruling on tariffs would face sharply higher duties added a second front of anxiety. With his earlier tariff authority invalidated, Trump signaled a pivot to a 15% universal tariff under a different legal provision. The European Union responded by freezing a trade deal with Washington. Markets, which despise uncertainty above almost all else, reacted accordingly.
The broader regional picture was equally unsettled. Asian equities gave up earlier gains, the S&P 500 had dropped 1% overnight, and the Nasdaq fell 1.1%. The Indian rupee weakened slightly, raising the specter of foreign capital outflows and higher import costs. Geopolitical tension over potential US military action against Iran added a final, unnerving note.
Yet not all signals pointed downward. Dr. VK Vijayakumar of Geojit Investments noted that Foreign Institutional Investors had been net buyers in ten of the last seventeen sessions — a sign of renewed confidence in India's improving corporate earnings and macroeconomic resilience. FII accumulation in capital goods and financials could provide a floor. The IT sector, where foreign investors had been sellers, would likely remain under pressure. The market's next direction, he suggested, hinges on which force proves stronger: the weight of global disruption, or the quiet momentum of India's own fundamentals.
The Indian stock market opened Tuesday morning into a rout. By the closing bell, the Nifty50 had shed 288 points to land at 25,424.65—a 1.12% decline. The BSE Sensex fell harder still, dropping 1,069 points to close at 82,225.92, a loss of 1.28%. The damage rippled through investor portfolios: roughly 4.6 lakh crore rupees in wealth simply evaporated, pulling the overall market capitalization down to nearly 464 lakh crore. The sell-off was not isolated to India. It was the visible edge of a global tremor.
The immediate trigger came from an announcement by Anthropic, an AI research company, that its Claude Code tool could automate the modernization of legacy systems built in COBOL—a programming language developed in the late 1950s that still powers the backbone of global finance. Anthropic estimated that roughly 95% of ATM transactions in the United States depend on COBOL. The implication was stark: artificial intelligence could soon handle work that has employed thousands of software engineers for decades. Indian IT stocks absorbed the blow first. Infosys dropped nearly 3%. HCL Technologies, Mphasis, and Persistent Systems each fell more than 2%. TCS, Tech Mahindra, and Wipro declined around 2% apiece. The Nifty IT index itself sank more than 2%, closing at 30,849.05. In the United States overnight, IBM—the company most exposed to COBOL modernization—plunged 13%.
But the crash had multiple fathers. On Monday, US President Donald Trump posted a warning on Truth Social: countries that tried to "play games" with a recent Supreme Court decision on tariffs would face sharply higher duties. The court had invalidated tariffs imposed under the International Emergency Economic Powers Act. Trump's response was to signal he would implement a 15% universal tariff under Section 122 of the Trade Act of 1974 instead. The European Union, reacting to these tariff changes, froze a deal with the United States. The message was clear: trade uncertainty would persist, and markets hate uncertainty.
Asian equities weakened in early Tuesday trade as Wall Street's sharp decline the night before rattled global sentiment. The MSCI Asia-Pacific ex Japan Index, which tracks the broadest measure of regional shares outside Japan, gave up earlier gains after a six-session rally and was trading 0.2% lower. South Korean stocks led the losses. Japan's Nikkei 225, by contrast, gained 0.7% as trading resumed after a public holiday. In the United States, the S&P 500 had dropped 1.0% overnight, erasing the gains from the previous week. The Nasdaq Composite fell 1.1%, dragged down by fears that artificial intelligence could disrupt employment and profitability across software and related sectors.
The Indian rupee weakened 0.07% to 90.95 against the US dollar. A depreciating currency prompts foreign investors to pull funds, adding pressure to equities. It also raises the cost of imports—particularly crude oil—potentially fueling inflation and compressing profit margins for companies dependent on imported inputs. Geopolitical tensions added another layer of anxiety. While fresh talks between the United States and Iran were scheduled for Geneva, Trump said on Friday he was considering the possibility of a military strike if Tehran failed to reach an agreement with Washington. Iran's Foreign Ministry spokesperson Esmaeil Baghaei responded on Monday that any US military action, even limited strikes, would be regarded as an "act of aggression" and would prompt a response.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, offered a measured reading of the landscape. Trump's State of the Union address, he noted, would be closely watched by markets globally. The tariff drama, he said, had more in store for economies and markets. The weakness in tech stocks stemming from AI disruption would likely continue, particularly given that American Depositary Receipts of Indian IT companies were under pressure. But Vijayakumar also identified a counterweight: Foreign Institutional Investors had been net buyers in ten of the last seventeen trading sessions, signaling renewed interest in India. The reason was improving corporate earnings. Given the robust macroeconomic fundamentals of the Indian economy and strengthening profit growth, this FII buying trend could persist. The sectors where FIIs had been accumulating—capital goods and financials—would likely remain resilient. The IT segment, where they had been sellers, would continue to face headwinds. The market's next move would depend on which force proved stronger: the pull of tariff anxiety and AI disruption, or the push of improving Indian fundamentals and foreign investor appetite.
Citas Notables
The tariff drama has more in store for economies and markets. We will have to wait and watch how this drama plays out.— Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited
Any US military action, even limited strikes, would be regarded as an act of aggression and would prompt a response.— Esmaeil Baghaei, Iran's Foreign Ministry spokesperson
La Conversación del Hearth Otra perspectiva de la historia
Why did Indian IT stocks fall so sharply when an American AI company made an announcement?
Because the announcement threatened the core business model of Indian IT services. If AI can automate the work of modernizing old banking systems—work that Indian engineers have done for decades—then demand for those engineers shrinks. Foreign investors immediately repriced the sector.
But that's a long-term concern. Why did it crash the market on the same day?
Markets don't wait for long-term concerns to materialize. They price in the possibility immediately. And it wasn't just the AI news. Trump's tariff threats came at the same moment. Investors were suddenly facing two shocks at once: technological disruption and trade uncertainty.
The rupee weakened. Does that matter for ordinary Indians?
It matters a lot. A weaker rupee makes imported goods more expensive. If you import crude oil—and India does, heavily—your costs rise. Companies pass that on as inflation. It also makes foreign investors nervous, so they pull money out, which weakens the rupee further. It's a spiral.
You mentioned FIIs buying Indian stocks. If they're buying, why is the market down?
They're buying selectively—in capital goods and financials, not in IT. The market is bifurcating. Some sectors look attractive to foreign money. Others, like IT, look like value traps. The overall index fell because IT is a large weight in it.
What happens next?
Everything hinges on Trump's State of the Union address and whether he actually implements those tariffs. If he does, global trade slows, which hurts Indian exporters. If he doesn't, the uncertainty lifts and markets can breathe. Meanwhile, the AI disruption story is real but slow-moving. That's a multi-year unraveling, not a one-day crash.