IT Rout Drags Benchmarks Lower Amid AI Fears, US Fed Rate Cut Hopes Fade

An end-of-day recap of all that transpired in the Indian markets, highlighting the major price movements and the factors driving them

India Stocks fall

By Dehuti Jani

February 12, 2026 at 11:41 AM IST

Indian equities declined on Thursday as heavy selling in information technology stocks pulled the benchmarks lower, amid mounting concerns over AI-led disruption and fading expectations of near-term US rate cuts. Rapid advances in automation tools have stoked fears over pressure on Indian IT’s labour-intensive model, triggering broad-based weakness in the sector.

At close, the Sensex fell 558.72 points (0.66%) to 83,674.92, while the Nifty50 declined 146.65 points (0.57%) to 25,807.20. The Nifty IT index plunged 5.51%, marking the steepest drop among sectoral gauges and extending its year-to-date decline to over 12%. Tech Mahindra, Infosys, TCS and HCLTech led the losses. Realty and Oil & Gas indices also ended lower, while Financial Services managed modest gains. Broader markets remained under pressure, with the Midcap and Smallcap indices slipping 0.47% and 0.64%, respectively.

Top Movers of the Day

Hindustan Unilever surged 4.8% to ₹2,612 after posting steady Q3FY26 earnings, with margin stability and improved volume growth lifting sentiment around FMCG defensives.

Hindustan Aeronautics rallied 6.3% to ₹3,845 amid strong order inflow commentary and continued defence sector momentum, extending recent gains.

Mahindra & Mahindra gained 3.9% to ₹2,148 following robust quarterly numbers driven by strong SUV sales and improved operating leverage.

Coal India advanced 4.5% to ₹468 after reporting improved realisations and stable production growth in Q3, supporting dividend expectations.

Trent climbed 5.1% to ₹4,235 as sustained retail expansion and strong same-store sales growth kept buying interest intact.

Eternal jumped 4.2% to ₹314 amid heavy volumes, extending its recovery on continued optimism around delivery platform monetisation.

Adani Ports rose 3.6% to ₹1,392 tracking sectoral strength and improved cargo volume trends.

Tata Consultancy Services (TCS) slipped 2.4% to ₹4,125 as IT stocks remained under pressure amid global tech uncertainty.

Asian Paints declined 1.9% to ₹3,245 on continued demand concerns in the decorative segment.

Bharti Airtel edged lower 1.6% to ₹1,245 amid mild profit-booking after recent gains.

Futures & Options
Nifty February 2026 futures settled at 25,849.10, a premium of 41.9 points over the spot Nifty, which declined 146.65 points or 0.57% to close at 25,807.20 in the cash market. Despite the downside in the index, the continued premium indicates limited aggressive short build-up ahead of expiry. The NSE’s India VIX rose 1.53% to 11.73, reflecting a mild uptick in near-term volatility expectations. Among stock futures, Infosys, Tata Consultancy Services and HDFC Bank emerged as the most actively traded contracts in the F&O segment. The February 2026 derivatives series will expire on 24 February 2026.

Bonds
Government bond yields edged lower on Thursday, with the 10-year 6.48% 2035 bond closing at 6.6833%, down from 6.7088% Wednesday. The decline was tempered by rising US Treasury yields ahead of local inflation data. Without further US yield drops, the 10-year yield is likely to move toward 6.75%, reflecting cautious market sentiment and global rate influences.

Forex
The rupee ended marginally stronger on Thursday, supported by likely intervention from the RBI, though corporate dollar demand trimmed early gains. The currency closed at 90.59 per dollar, up 0.1% from the previous session. The rupee had rallied to an intraday high of 90.14 on the interbank order matching system following aggressive dollar sales, reportedly via a large state-run bank before paring gains as importers stepped in. Traders noted that the intervention discouraged fresh short positions, helping stabilise the unit despite steady underlying dollar demand.

Crypto
Crypto markets showed mixed momentum, with Bitcoin attempting to stabilise above the $65,000 psychological level after a steep correction from its 2025 peak near $100,000. At last check, Bitcoin was trading 0.45% lower at $67,062.14, as fading post-election optimism and delays in US crypto legislation weighed on sentiment. Ethereum diverged slightly from the broader weakness, edging 0.11% higher to $1,967.21, even as investors remained cautious amid evolving regulatory signals and upcoming US economic data that could influence liquidity conditions across risk assets.

US Stock Futures
US stock futures rose on Thursday as investors positioned ahead of fresh corporate earnings and the upcoming inflation print, following a stronger-than-expected January jobs report. Dow Jones Industrial Average futures rose 0.3%, while S&P 500 futures gained 0.3%. Nasdaq 100 futures also advanced around 0.3%, indicating cautious optimism after Wall Street’s choppy session in which major indices ended largely flat. Traders are now closely watching inflation data for further clarity on the Federal Reserve’s rate trajectory.

US Treasury Notes
US Treasury yields held firm after rebounding on the back of stronger-than-expected January labour data. The resilient jobs print has pushed back expectations for the first Federal Reserve rate cut from June to July 2026, reinforcing a higher-for-longer narrative. The benchmark 10-year Treasury yield is hovering around 4.17%, maintaining gains from the prior session, while the policy-sensitive 2-year yield is trading near 3.51%, reflecting reduced bets on near-term monetary easing.

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