Sensex-Nifty Today, February 25: IT Rout, Tariff Jitters Sink India Stocks
The sensex nifty stock market fell on February 25 as a sharp IT sell-off, tariff worries, a weaker rupee, and firmer crude hurt risk appetite. Fresh claims around AI-driven COBOL modernization spooked sentiment in software exporters, while renewed Trump tariff warnings revived trade fears. We also saw profit-taking after a strong run in select midcaps. Foreign flows remain mixed, but recent buying in capital goods and financials offered some support. Here is why market is down today and what to watch next.
IT Sell-off: AI, COBOL Fears, and Valuations
Reports said fresh AI-led claims around quick COBOL modernization could squeeze legacy maintenance work, a key revenue stream for Indian IT. That triggered broad selling across large and mid-tier names, with fears of weaker pricing and slower deal ramp-ups. We saw traders cut exposure to high-multiple counters. Media also flagged near-term caution from US clients, adding to pressure. See coverage by Moneycontrol.
Street focus now shifts to deal pipelines, conversion, and margin commentary in the March and June quarters. Any pause in discretionary tech spends by US banking, retail, and healthcare clients could hit growth. We will track total contract value, pricing, and onsite mix. Until clarity improves, the market may reward firms with stable annuity revenues, stronger cash flow, and lower exposure to vulnerable legacy workloads.
Tariff Jitters, Rupee, and Crude Weigh on Risk
Renewed warnings of broad US import tariffs kept global risk mood weak and raised worries for India’s exporters. Any rise in trade barriers can slow orders in auto, engineering, and textiles, while also hurting supply chains. Domestic equities tracked this caution as traders reduced cyclical bets and raised cash. For context on the tariff overhang, see reporting by The Hindu.
A weaker rupee increases the import bill in ₹ terms and can lift inflation risks if crude stays firm. That narrows room for early rate cuts and keeps foreign investors cautious. Higher oil also dents margins for transport and chemical users. In this backdrop, rate-sensitive pockets and midcaps saw more profit-taking than defensives, while export-heavy names were mixed.
Where Flows Are Going and How to Position
Despite today’s sell-off, recent foreign institutional investor flows have favored capital goods and financials, where domestic demand and order books look healthier. This helped limit the broader drawdown. We will watch if this rotation holds as IT underperforms. Balanced portfolios that pair domestic cyclicals with cash-generative exporters may manage volatility better than narrow bets in single themes.
We prefer staggered entries, SIPs in broad index funds, and strict asset allocation over chasing rebounds. Use stock-specific stop-losses, keep some cash, and avoid leverage. For IT exposure, tilt toward firms with sticky annuity work and strong balance sheets. Keep tracking crude, the rupee, and tariff headlines, as these can swing short-term direction in stock markets.
Final Thoughts
India equities slipped as tech weakness, tariff chatter, a softer rupee, and firm oil weighed on risk. The core debate is simple: will AI-led modernization shrink legacy work faster than new digital deals can grow, and will trade tensions hurt exports. Until we see clearer data, we expect choppy sessions and rotation across sectors.
What should investors do now. First, avoid sweeping calls on sectors. Focus on company-level cash flow, deal quality, and client exposure. Second, keep asset allocation steady, use SIPs, and add selectively on sharp corrections. Third, watch macro markers that can move the sensex nifty stock market in the near term: crude trends, USDINR, and fresh tariff headlines. Finally, track management commentary through March and June quarters for signs of improving budgets or pricing discipline. A patient, rules-based plan can help you stay invested while keeping risks in control. Use staggered purchases, hold emergency cash for six months, and avoid concentration in single themes. If volatility spikes, consider hedges through index funds instead of derivatives.
FAQs
Why is the Indian stock market down today?
Indian equities fell as a sharp IT sell-off, sparked by AI-driven COBOL modernization fears, met renewed tariff warnings from the US. A weaker rupee and firmer crude added to selling pressure. Traders also booked profits in midcaps after strong gains. Sentiment stayed cautious despite selective FII buying.
Will IT stocks keep underperforming?
Near term, caution may linger until we see clearer deal conversion, pricing, and margin guidance. If discretionary tech budgets slow, earnings risk rises. On the other hand, stable annuity work, cost takeouts, and strong balance sheets can cushion some firms. Watch March and June commentary and total contract value trends.
What should investors track this week?
Track crude moves, USDINR, and any fresh tariff signals. In earnings and updates, focus on order books, client budgets, pricing, and hiring trends in IT. Monitor FII flows and market breadth. If volatility rises, stick to asset allocation and use SIPs instead of timing every bounce.
How can I manage risk when stock markets turn volatile?
Keep diversification tight, avoid leverage, and use staggered entries. Set stop-loss levels for trading positions. Hold emergency cash for six months of expenses. For core portfolios, prefer index funds or large caps, and add gradually on corrections rather than chasing rallies.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.