Nifty Dips Below Key Averages as IT, Auto Drag Down

Indian benchmarks ended the session sharply lower as broad-based selling hit the markets. The Nifty slipped 317.90 points, or 1.25%, to 25,178.65, while the Sensex fell 961.42 points, or 1.17%, to 81,287.19. The day underscored a risk-off mood, with weakness concentrated in the IT and auto sectors, even as some defensive pockets in private banks offered a glimmer of resilience.

Traders said volatility kept investors on edge as concerns around AI disruption, coupled with a hotter-than-expected inflation print, kept sentiment cautious for the near term. Global cues remained negative, with January wholesale inflation rising to 2.9% and U.S. markets showing risk-off behavior, weighing on Indian equities. Within the domestic space, auto and financials led the declines while the IT pack showed selective buying, leaving room for stock-specific moves amid the broad selling.

Looking at the weekly action, Nifty hovered around critical levels and slipped below the 25,200 mark, a technical threshold that traders watch closely for clues on next week's direction. An analyst noted that when volatility climbs, clarity fades and emotions can overwhelm decision-making, underscoring the current cautious mood as February’s trading range widened. The market activity reflected a blend of macro headwinds and sector-specific dynamics, with ITs under pressure overall and autos bearing the brunt of selling.

On the global stage, additional geopolitical and macro developments contributed to a risk-off backdrop, reinforcing caution among investors as they await clearer signals from the week ahead. While some benchmarks showed resilience in pockets like certain private banks, the broader picture remained fragile, emphasizing the need for prudent positioning and attention to key technical levels.

In summary, the market is navigating a volatile environment shaped by AI fears, inflation data, and global cues, with traders eyeing support around known moving averages and looking for more definitive cues next week. Investors are likely to favor defensives and high-quality large-caps while avoiding aggressive leverage until sentiment improves and technicals confirm a firmer footing.

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