Indian stocks fell on Friday, recording a widespread decline led by the financial sector, with the main stock indices posting their third consecutive month of decline. Technology stocks, on the other hand, experienced their worst month since September 2008, amid fears that artificial intelligence may erode their profits.
The technology sector’s slump overshadowed improving company results and easing trade tensions, after India concluded a trade agreement with the European Union and reached a provisional agreement framework with the United States.
On the day, the Nifty 50 lost 1.25% at 25,178.65 points and the BSE Sensex dropped 1.17% at 81,287.19 points. Financial stocks, key players in the market, fell by 1.6%, leading the decline.
Throughout the month, the Nifty dropped by 0.6% while the Sensex lost 1.2%.
The technology index plunged by 19.5% in February, marking its worst monthly performance since the global financial crisis that shook stock markets internationally.
Its ten components lost over $62.8 billion in market capitalization this month, as American companies like Anthropic and Palantir made advancements in AI automation tools.
“A cloud of uncertainty now hangs over the profitability and margins of Indian technology companies due to AI,” said Saurabh Jain, assistant vice president of retail equities at SMC Global.
“The future looks uncertain as investors question the software companies’ ability to reinvent their economic model in an AI-dominated world,” he added.
Apart from technology, 14 out of the 15 other major sectors recorded monthly gains. Small and mid-cap indices saw increases of 0.3% and 1.2% respectively.
Public sector banks advanced by 8.9%, led by the country’s largest bank, State Bank of India, which gained 11.6% and achieved its best month since March 2025, driven by solid results.
The durable consumer goods index jumped by 9.3%, with government tax cuts fueling hopes of demand recovery and profit improvement.
Overall, Nifty 50 companies saw a 7.5% year-on-year net profit growth in the fourth quarter of 2024, while BSE 500 index companies witnessed a 16% profit growth, despite a one-off impact related to labor code adjustments.
“Banks, automobiles, energy, and consumption-related themes appear particularly attractive as profits show resilience and trade concerns fade,” said Saurabh Jain of SMC Global.
“But benchmark indices could still experience a consolidation phase, with technology remaining a weight on the market.”
In terms of individual stocks, Apollo Hospitals, Adani Enterprises, and Eicher Motors rose by 12.4%, 7%, and 12.5% respectively, buoyed by strong quarterly results.
Investors are now eagerly awaiting the release of India’s GDP for the fourth quarter, expected after the market closes. These figures will be the first released under the new series, with a new base year set at 2022-23 instead of 2011-12.
