Indian shares post modest gains as IT selloff tempers US trade deal optimism

BENGALURU: India’s equity benchmarks ended marginally higher on Wednesday, as losses in local IT stocks following a global selloff of software companies over artificial intelligence-fuelled disruption fears dampened optimism over the U.S. trade deal.

The Nifty 50 rose 0.19% to 25,776, while the BSE Sensex added 0.09% to 83,817.69. They fell as much as 0.7% in early trade on pressure from IT stocks.

Thirteen of the 16 major sectors ended higher. IT sector, which has the second-heaviest weightage on benchmarks, plunged 5.9% in its biggest daily drop in nearly six years.

The broader small-caps and mid-caps rose 1.3% and 0.6%, respectively.

U.S. AI developer Anthropic on Friday launched plug-ins for its Claude Cowork agent that would automate tasks across legal, sales, marketing and data analysis. It sparked worries of a disruption in traditional software businesses.

Sunny Agrawal, head of fundamental equity research at SBICAPS Securities, called the drop in domestic IT stocks a knee-jerk reaction.

“It is not clear how much impact this will have on software companies, but the market is pre-empting the concerns that a new AI tool could reduce billable hours and cost arbitrage for them,” he said.

Top software exporters Tata Consultancy Services, Infosys, HCLTech, and Tech Mahindra lost between 4.1% and 7.3%, topping the list of losers on the Nifty 50 index.

Other sectors with exposure to the U.S. market extended their rally to the second session after President Donald Trump on Monday announced a trade deal to cut tariffs on Indian goods to 18% from 50%.

Textile stocks Gokaldas Exports and Indo Count Industries surged 20% and 13.2%, while seafood exporters Avanti Feeds and Apex Frozen also added 11.7% and 6.8%, respectively.

Among other stocks, upstream oil companies such as ONGC and Oil India added 3.9% and 3.7%, tracking a rise in crude oil prices on escalating Middle East tensions.