Expiry Day Sell-Off Drags Nifty Below 25,450 As IT Stocks Lead Sharp Market Decline
| Index | Price | Change | % Chg |
| Nifty 50 | 25,424.65 | 288.35 | -1.12% |
| Nifty Bank | 61,047.30 | 216.95 | -0.35% |
| Nifty Financial | 28,295.10 | 159.90 | -0.56% |
| BSE SENSEX | 82,225.92 | 1068.74 | -1.28% |
Indian equity markets witnessed a sharp and broad-based sell-off on February 24 as benchmark indices Sensex and Nifty snapped their recent two-day gaining streak and ended significantly lower amid expiry-day volatility and persistent selling pressure in information technology stocks. The market decline was primarily driven by renewed fears around artificial intelligence-led disruption in the global IT services industry, uncertainty around US tariff policies and weak global cues, all of which combined to trigger risk-off sentiment among traders and institutional investors.
At the close, the BSE Sensex declined 1,068.74 points or 1.28 percent to settle at 82,225.92, while the NSE Nifty 50 fell 288.35 points or 1.12 percent to close at 25,424.65, slipping decisively below the important psychological level of 25,450. The sharp fall erased nearly ₹2.85 lakh crore of investor wealth, pulling the total market capitalisation of BSE-listed companies down to approximately ₹466 lakh crore. The session was marked by persistent selling pressure as the indices opened weak and extended losses through the day, highlighting fragile market sentiment.
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Here’s What Happened Today And Why Traders Reacted
Market participants reacted strongly to a combination of domestic and global developments that increased uncertainty and encouraged traders to reduce risk exposure ahead of monthly derivatives expiry. Expiry-day adjustments in futures and options positions added to intraday volatility, while global developments and sector-specific concerns amplified selling pressure across key market segments.
Key triggers behind the market fall included:
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Sharp IT sector sell-off driven by AI disruption fears
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Renewed tariff threats from Donald Trump
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Weak global market sentiment
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Expiry-day derivatives volatility
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Weak rupee against the US dollar
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Rising crude oil prices
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Ongoing geopolitical tensions
Derivatives data suggested that traders remained cautious, with strong resistance seen near 26,000 and support around 25,500, while the Put-Call Ratio of 0.97 indicated neutral positioning ahead of expiry. The India VIX declined slightly by 0.12 percent to 14.15, suggesting moderate volatility levels even though price swings remained sharp. Analysts noted that expiry-day adjustments often exaggerate price movements, but the underlying weakness in IT stocks amplified the decline significantly.
Massive IT Sell-Off Emerges As Biggest Market Drag
The information technology sector remained the single largest drag on the benchmark indices as the Nifty IT Index plunged as much as 5.26 percent, extending its losing streak to five consecutive sessions and hitting a multi-month low. The sector has now corrected nearly 21 percent during the current month, reflecting a major shift in investor sentiment towards technology stocks.
Heavyweight IT companies including Tech Mahindra, Infosys, Tata Consultancy Services and HCL Technologies came under intense selling pressure amid renewed concerns that artificial intelligence technologies could disrupt traditional outsourcing business models and reduce long-term growth opportunities. The sell-off intensified after the widely discussed Citrini Research report warned that Indian IT companies may face accelerating contract cancellations through 2027, triggering fresh fears among investors.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said:
“The trend of weakness in tech stocks stemming from the potential AI impact continues. The weakness in the ADRs of Indian IT companies indicates that this segment will continue to remain under pressure.”
Among the biggest losers in the Nifty pack:
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Tech Mahindra fell 6.17%
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HCL Technologies dropped 5.83%
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Eternal declined 5.07%
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TCS fell 3.56%
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Infosys slipped 3.56%
The sustained decline in IT stocks has started affecting broader market sentiment because the sector carries significant weight in benchmark indices and institutional portfolios.
Broader Markets And Realty Stocks Extend The Downtrend
Selling pressure was not limited to large-cap stocks, as broader market indices also ended lower amid weak market breadth and continued risk aversion among investors. The decline across midcap and smallcap stocks indicated that market participants were reducing exposure across segments rather than limiting selling to frontline stocks.
The Nifty Midcap index fell 0.3 percent, while the Nifty Smallcap index declined 0.55 percent, reflecting weakness across growth-oriented segments.
Market breadth remained heavily negative:
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Advancing stocks: 1069
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Declining stocks: 2102
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52-week highs: 55
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52-week lows: 303
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High band hitters: 23
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Low band hitters: 106
Nearly 350 stocks touched fresh 52-week lows, including KPIT Technologies, Mastek, Zensar Technologies, Hexaware Technologies, Tata Technologies, Info Edge, Sonata Software, Tata Elxsi and Cyient, indicating significant pressure on technology-related companies.
However, around 90 stocks hit 52-week highs, including NTPC, Polycab India, Astral, SBI, Cummins India, Federal Bank and L&T, suggesting selective buying in infrastructure and defensive sectors.
The realty sector declined over 2 percent, reflecting broader weakness and concerns over economic growth momentum.
Defensive Sectors Provide Limited Stability
Despite the sharp decline in benchmark indices, some sectors displayed relative resilience and helped prevent a deeper correction. Defensive sectors such as FMCG and pharma saw mild buying interest, while commodity-linked sectors benefited from rising global prices.
Top Gaining Sectors
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Metal (+0.93%)
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Oil & Gas (+0.50%)
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Pharma (+0.24%)
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FMCG (+0.19%)
Top Losing Sectors
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IT (-4.74%)
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Realty (-2.54%)
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Media (-1.31%)
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Auto (-0.45%)
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Consumer Durables (-0.09%)
Top Gaining Stocks
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NTPC (+2.41%)
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Coal India (+1.28%)
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JSW Steel (+1.27%)
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Hindalco (+0.99%)
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Hindustan Unilever (+0.83%)
Top Losing Stocks
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Tech Mahindra (-6.17%)
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HCL Tech (-5.83%)
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Eternal (-5.07%)
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TCS (-3.56%)
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Infosys (-3.56%)
PSU banks and metal stocks showed relative strength, while healthcare and pharma stocks provided defensive support during the volatile session.
Currency Weakness And Rising Crude Add Pressure
The Indian rupee weakened marginally amid the sharp fall in domestic equity markets and uncertainty surrounding global trade developments. Currency weakness added to investor concerns as it typically signals capital outflows and macroeconomic pressures.
The rupee settled 6 paise lower at 90.95 per dollar, after trading within a narrow range of 90.91 to 90.97, with traders indicating possible RBI intervention to stabilise the currency.
Forex traders noted:
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Weak equity markets pressured the rupee
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Higher crude oil prices increased macro risks
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India-US trade deal uncertainty persisted
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Foreign inflows provided partial support
Brent crude prices rose nearly 1 percent to $72.13 per barrel, which is negative for India as higher oil prices increase inflation risks and widen the trade deficit.
Global Cues And Tariff Uncertainty Weigh On Sentiment
Global market developments also contributed significantly to the weak sentiment in domestic equities. US markets declined nearly 2 percent overnight after US President Donald Trump warned countries against abandoning trade deals following the US Supreme Court’s decision to strike down emergency tariffs.
Trump indicated that higher tariffs could be imposed under alternative trade laws, increasing uncertainty for global trade and economic growth.
Rodrigo Catril, Senior FX Strategist at NAB, said:
“The tariff landscape is now more uncertain than before, uncertainty is not good news for any economy or market.”
Global market indicators showed mixed trends:
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Stoxx Europe 600 fell 0.2%
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S&P 500 futures rose 0.2%
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Nasdaq futures rose 0.2%
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MSCI Asia Pacific Index remained flat
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MSCI Emerging Markets Index rose 0.4%
Despite relatively stable Asian markets, investors remained cautious due to uncertainty surrounding global trade policies.
Technical Breakdown Signals Risk Of Further Decline
From a technical perspective, the Nifty formed a large bearish candle and slipped below its 20-day, 50-day and 100-day exponential moving averages, indicating sustained downward pressure and weakening short-term momentum.
Key technical levels include:
Support Levels:
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25,370–25,350 immediate support
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25,200–25,000 strong support zone
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25,150 and 24,800 next downside targets
Resistance Levels:
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25,600–25,650 immediate resistance
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25,750 key resistance
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26,000 major hurdle
Analysts noted that 25,200 near the 200-day EMA will be a crucial support level, and a decisive breakdown below this level could trigger a sharper correction.
What This Means For Investors And Traders
The sharp market decline highlights how global macro risks and artificial intelligence-related concerns are increasingly influencing Indian equity markets, particularly the IT sector which holds significant weight in benchmark indices.
Portfolio implications include:
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IT-heavy portfolios remain vulnerable
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Export-oriented sectors under pressure
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Defensive stocks showing resilience
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Expiry volatility likely to continue
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Stock-specific opportunities emerging
Analysts believe the 25,200–25,000 zone could emerge as an accumulation area for long-term investors, particularly in fundamentally strong companies.
However, near-term market direction will likely depend on developments in global tariffs, interest rates, IT sector outlook and geopolitical tensions. Until clearer signals emerge, markets are expected to remain volatile with a downward bias in the short term.
FAQs Expiry Day Turbulence Sends Nifty Lower
1. Why Did The Nifty Fall Below 25,450 On Expiry Day Despite Moderate India VIX Levels?
The Nifty slipped below 25,450 primarily due to heavy selling in IT stocks, expiry-day derivatives adjustments, and renewed global trade uncertainty. Even though the India VIX remained near 14 levels — indicating moderate volatility — institutional selling and sector-specific weakness triggered sharp declines in benchmark indices.
2. How Is Artificial Intelligence Disruption Impacting Indian IT Stocks And Market Sentiment In 2026?
Artificial intelligence disruption concerns have started influencing valuations of Indian IT companies such as Infosys, TCS, and HCL Technologies. Reports suggesting potential contract cancellations and reduced outsourcing demand have triggered sustained selling pressure, making IT stocks one of the most volatile sectors in 2026.
3. What Does The Five-Day Decline In The Nifty IT Index Indicate For Medium-Term Investors?
A five-day continuous decline in the Nifty IT index suggests a shift in investor sentiment rather than just short-term profit booking. The sector’s nearly 21% monthly correction indicates that investors are reassessing growth expectations, though long-term investors may find selective opportunities at lower valuations.
4. How Does Monthly F&O Expiry Typically Increase Volatility In Indian Stock Markets?
Monthly F&O expiry often increases market volatility because traders close or roll over derivative positions. This process leads to sharp intraday swings, sudden price movements, and increased trading volumes, especially when combined with weak global cues or sector-specific selling pressure.
5. Why Are Rising Crude Oil Prices And Weak Rupee Negative Signals For Equity Markets?
Higher crude oil prices increase India’s import costs and inflation risks, while a weaker rupee signals capital outflows and macroeconomic pressure. Together, these factors reduce investor confidence and often trigger defensive positioning in equity markets.
6. Which Key Technical Levels Should Traders Watch After Nifty Broke Below 25,500 Support?
After breaking below 25,500, traders should closely monitor:
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Immediate support: 25,370–25,350
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Strong support: 25,200–25,000
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Immediate resistance: 25,600–25,650
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Major resistance: 25,800–26,000
A breakdown below 25,200 could accelerate downside momentum, while a move above 25,750 may signal recovery.
7. How Should Investors Rebalance Their Portfolios After The Recent IT-Led Market Correction?
Investors may consider gradually reducing overexposure to IT stocks and increasing allocation toward defensive sectors such as FMCG, pharma, and utilities. PSU banks, metals, and energy stocks have shown relative strength and may offer better risk-adjusted returns during periods of market volatility.
