Pre Market: India Markets Grapple with AI Disruption Fears Amid Global Sell-Off

Pre Market: India Markets Grapple with AI Disruption Fears Amid Global Sell-Off

1. GLOBAL MARKET SUMMARY

US Market Overnight (February 23, 2026):

• S&P 500 declined following President Donald Trump’s announcement of new 15% US tariff measures
• Nasdaq fell amid technology sector concerns
• Dow Jones dropped as trade uncertainty weighed on investor sentiment

European Markets (February 23, 2026):

• FTSE (UK): Declined on global trade tensions
• DAX (Germany): Closed lower amid broader European weakness
• CAC 40 (France): Fell in line with regional markets

Asian Markets:

• Nikkei 225 (Japan): Closed for trading holiday
• Hang Seng (Hong Kong): Gained on selective buying
• KOSPI (South Korea): Hit record high amid Trump tariff move
• Shanghai Composite: Mixed performance

2. KEY HEADLINES & EVENTS (Last 16-17 hours)

Government Announcements (India)

RoDTEP Duty Benefit Cut for Textile Exporters:

• Government reduced RoDTEP duty benefits by 50% for textile sector
• Exporters urged review of decision citing higher costs and slowing demand
• RoDTEP scheme refunds taxes and duties not rebated under other schemes

Haryana Government Fraud Recovery:

• Haryana Chief Minister Nayab Singh Saini announced full recovery of Rs 590 crore from IDFC First Bank fraud case
• Investigations ongoing with forensic audit appointed
• Rs 556 crore returned to state government

Company Results & Announcements (India)

IT Sector AI Disruption Concerns:

• IBM plummeted 13% on Wall Street - worst drop in 25 years - after Anthropic’s Claude AI tool claims ability to streamline COBOL code
• Indian IT stocks declined up to 8% on fears of AI-driven disruption
• Nifty IT index crashed over 21% in February - worst monthly decline since 2008 global financial crisis
• Heavyweights including Infosys, HCLTech, TCS tumbled sharply
• Midcap IT stocks fell up to 8% as sell-off deepened beyond large caps
• Persistent, Coforge led midcap losses

Cybersecurity Sector Pressure:

• Cybersecurity stocks in India declined up to 20% after Anthropic launched Claude Code Security
• TAC Infosec (Vijay Kedia holding) hit 20% lower circuit
• TechD Cybersecurity fell over 14%
• Four Vijay Kedia-backed stocks crashed up to 20% on AI-led disruption fears

Partnership Announcements:

• Natco Pharma shares rose over 6% to highest level since January 8
• Eris Lifesciences gained nearly 4%, marking third straight session of gains
• Partnership announced to commercialize Semaglutide in India
• Natco received CDSCO approval to manufacture generic semaglutide; planned launch in March 2026

Banking Sector Developments:

• IDFC First Bank shares saw brief surge then settled flat after fraud recovery announcement
• Bank had previously reported fraudulent activity by employees at Chandigarh branch
• Analysts believe valuation reset reflects worst-case earnings impact of fraud disclosure
• LIC’s investment in IT stocks declined by Rs 42,500 crore in two months
• Maximum value erosion seen in Infosys and TCS at Rs 26,510 crore

Retail & Consumer:

• Eternal (retail stock) fell 6% amid heavy selling pressure, emerging as one of top drags on Sensex
• Despite strong Q3 earnings and robust Blinkit growth, stock underperformed in 2026

Fintech Expansion:

• MobiKwik shares surged up to 13% after subsidiary received BSE approval to commence stock broking operations
• Move marks company’s expansion into financial services

Real Estate Sector Impact:

• Real estate stocks declined up to 5% as sharp IT selloff renewed worries about commercial property demand and urban housing appetite
• Nifty Realty index dropped 3%
• Prestige Estates, Lodha, Signatureglobal, and Godrej Properties among biggest losers

Textile Sector Pressure:

• Gokaldas Exports, Pearl Global, Trident, and other textile companies fell up to 6%
• Decline followed government’s 50% cut in RoDTEP duty benefits

Institutional Activity:

• Institutions trimmed stakes in 9 midcap stocks during Q3 (December 2025 quarter)
• Mutual funds increased stakes in 39 companies from Nifty Microcap 250 index over past four quarters
• Among nine consistently-held MF picks, two stocks turned multibaggers (doubled in value)
• Four stocks in the list declined more than 40% over same period

M&A and Corporate Actions:

• Smallcap IT stock announced fresh acquisition for clean energy solutions for data centres and industrial sectors
• PCJ shares climbed after subsidiary announced global expansion in mining venture
• PCJ Gems & Jewellery Limited incorporated subsidiary - PCJ Mining SARL - in Republic of Chad

Real Estate High-Value Transactions:

• Ajit Jain of Berkshire Hathaway purchased apartment at DLF Camellias in Gurugram for Rs 85 crore

Brokerage Views:

• Motilal Oswal retained Buy rating on Mphasis citing strong deal momentum, stable demand trends, and steady execution
• Motilal Oswal maintained buy ratings on seven companies across technology, automobile, and consumer sectors
• Upside potential up to 41% highlighted
• HSBC argued AI will not replace enterprise software but become embedded within it as supporting layer
• Brokerage sees legacy software vendors as key beneficiaries of AI adoption

Unlisted Market:

• Reliance Retail, Flipkart, and Malabar Gold and Diamonds topped JM Financial Hurun India’s list of 100 high-potential unlisted companies
• Collectively generated Rs 8.9 lakh crore revenue in 2025
• NSE unlisted shares cooled to Rs 2,050 even after SEBI clearance and Delhi HC relief with no firm IPO date

Global News & Events

US Tariff Announcement:

• US President Donald Trump announced new 15% tariff measures over weekend
• US Supreme Court ruling on tariffs and subsequent decision offer little clarity on trade deal path
• Markets concerned about trade uncertainty with India and other partners

AI Technology Disruption:

• Anthropic’s Claude AI tool claims ability to streamline COBOL code
• COBOL remains critical language for many Indian IT companies supporting global banking, insurance, and retail systems
• IBM’s 13% plunge triggered global tech sector concerns
• AI startup Anthropic’s new security tool, Claude Code Security, detects and fixes vulnerabilities in open-source software
• Cybersecurity stocks in India and US fell sharply on AI-driven disruption concerns

Commodity Markets:

• Gold prices fell from three-week highs while holding above $5,200 per ounce
• Silver slipped over 2% amid stronger US dollar
• COMEX silver inventory fell below 90 million ounces
• Market focus on US-Iran tensions

Rupee Concerns:

• Indian rupee remains cautious as deferred trade talks, NDF maturities and rising crude prices weigh on sentiment
• Fresh US tariff uncertainty stokes fears of rupee dropping below 91 against dollar

Asian Market Performance:

• KOSPI hit record high amid Trump’s tariff move
• Hang Seng gained
• Nikkei closed for trading holiday

3. WHAT TO WATCH TODAY

Scheduled IPO Activity:

• Gaudium IVF IPO: Closes today; subscribed 6.9 times by late afternoon Day 3; retail and NII demand strong
• Clean Max Enviro Energy Solutions IPO: Day 2 subscription at 37%; issue size Rs 3,100 crore; GMP signals flat listing
• Shree Ram Twistex IPO: Subscription at 30% on Day 2; retail portion oversubscribed more than two times; GMP rose to 9%; issue closes February 25; listing scheduled March 2
• PNGS Reva Diamond Jewellery IPO: Opens; subscription at 5% on Day 1; raised Rs 171 crore from anchor investors
• Omnitech Engineering IPO: Coming soon; dates and price band announced

Corporate Events:

• Board meetings and AGMs to be monitored for company announcements

Market Technical Levels:

• Nifty technical analysis suggests 25,200-25,000 zone as potential support area from medium-term perspective
• VIX and momentum indicators flashing warning signs

Sector Focus:

• IT stocks: Monitor for continued reaction to AI disruption fears
• Real estate: Watch for impact from IT sector weakness
• Banking: Follow IDFC First Bank developments post fraud disclosure
• Fintech: Track MobiKwik’s stock broking expansion progress

Economic Indicators:

• No major economic data releases scheduled for India
• Watch for any government policy announcements
• Monitor US-Iran situation and crude oil price movements

4. SUMMARY

Indian markets are preparing for today’s trading session amid significant concerns about AI-driven disruption in the technology sector, triggered by Anthropic’s claims about its Claude AI tool’s ability to streamline COBOL code. The situation intensified after IBM’s 13% plunge on Wall Street - its worst drop in 25 years - which sparked a broad sell-off in Indian IT stocks, with the Nifty IT index crashing over 21% in February, marking its worst monthly decline since the 2008 global financial crisis.

Beyond IT, the disruption fears have spread to related sectors. Real estate stocks declined on worries about commercial property demand and urban housing appetite given the sector’s interlinkages with IT employment. Cybersecurity companies also faced pressure after Anthropic’s launch of Claude Code Security raised concerns about AI’s impact on legacy systems and vulnerability management.

On the policy front, the government’s decision to cut RoDTEP duty benefits by 50% for textile exporters added pressure on that sector, with companies like Gokaldas Exports, Pearl Global, and Trident declining up to 6%. Exporters have urged the government to review the decision, citing higher costs and slowing demand.

Global factors also weigh on sentiment. US President Donald Trump’s announcement of new 15% tariff measures, combined with the US Supreme Court ruling on tariffs, has created trade uncertainty that markets are still digesting. The US dollar strengthened, putting pressure on gold prices (down 0.55%) while silver (up 0.33%) showed divergence.

Corporate news provided some bright spots. Natco Pharma and Eris Lifesciences gained up to 6% on announcing a partnership to commercialize Semaglutide in India. MobiKwik surged 13% after its subsidiary received BSE approval to start stock broking operations. IDFC First Bank saw brief strength after the Haryana Chief Minister announced the recovery of Rs 556 crore from a fraud case.

IPO market activity remains robust with multiple issues currently open. Gaudium IVF’s IPO closes today with strong subscription at 6.9 times, while Clean Max Enviro Energy Solutions (37% subscribed), Shree Ram Twistex (30% subscribed), and PNGS Reva Diamond Jewellery (5% subscribed on opening day) are all currently bidding.

Institutional activity data shows mixed trends, with mutual funds increasing positions in microcap stocks even as institutions trimmed stakes in select midcaps during Q3. The unlisted market highlighted Reliance Retail, Flipkart, and Malabar Gold and Diamonds as top potential gems, collectively generating Rs 8.9 lakh crore in revenue in 2025.

Markets will now have to see how these developments - AI disruption fears, tariff uncertainty, sector-specific policy changes, and corporate news - frame today’s trading session and influence investor sentiment across sectors.

Details for information purposes only. Don’t treat this as financial advice.