MUMBAI: Benchmark equity indices Sensex and Nifty tumbled over 1 per cent in early trade on Friday, led by steep losses in IT stocks amid weak global cues and persistent concerns over artificial intelligence-led disruptions which weighed on investor sentiment.
The 30-share BSE Sensex tanked 883.4 points, or 1.05 per cent, to 82,791.52 in early deals.
The 50-share NSE Nifty dropped 262.60 points, or 1.02 per cent, to 25,544.60.
Technology stocks extend the brunt of selling pressure from the previous session.
Heavyweights such as Infosys, Tata Consultancy Services, HCL Technologies and Tech Mahindra were the major laggards on the Sensex.
Eternal, Hindustan Unilever, Adani Ports, Trent, Tata Steel, Reliance Industries, IndiGo, Larsen & Toubro, UltraTech Cement and NTPC were also trading in the red territory.
Bajaj Finance, HDFC Bank and Bharti Airtel were the only gainers.
The BSE SmallCap Select Index dropped 1.93 per cent, while the MidCap Select Index fell 1.40 per cent.
"Markets have fallen into a turbulent phase which will cause some panic among investors even while offering opportunities. The sell off in AI stocks in US markets was expected but the timing and extent of the sell-off was not known," VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.
"For the Indian market, this correction in AI stocks is a positive, because last year's global rally was primarily an AI trade in which India, an AI laggard, couldn't participate. So the unwinding of the AI trade, if it persists, is a positive from the Indian perspective," Vijayakumar added.
He further said, "What is rattling the Indian market now is the massive sell-off in IT stocks, which is the second largest profit pool of India Inc.
The real impact of the 'Anthropic shock' on the IT sector is yet to be ascertained."
In Asian markets, Hong Kong's Hang Seng benchmark, Japan's Nikkei 225 index, Shanghai's SSE Composite index were trading lower, while South Korea's Kospi was quoting in the positive territory.
US equities market ended lower in overnight deals on Thursday.
"Wall Street indexes fell sharply on Thursday, with the technology-heavy Nasdaq slumping 2 per cent, as investors intensified their selloff of tech shares and fled transport stocks amid worries about artificial intelligence disruption," Devarsh Vakil, Head of Prime Research, HDFC Securities, said.
He added that major tech names fell sharply as concerns mounted about AI's potential to disrupt business models.
Meanwhile, Foreign institutional investors bought equities worth Rs 108.42 crore on Thursday, while domestic institutional investors were also net buyers of stocks worth Rs 276.85 crore, according to exchange data.
Brent crude, the global oil benchmark, slipped 0.16 per cent to USD 67.41 per barrel.
On Thursday, the 30-share BSE Sensex declined 558.72 points to settle at 83,674.92.
The 50-share NSE Nifty declined 146.65 points to end at 25,807.20.