₹3 Lakh Crore Selloff – Sensex Tumbles Over 800 Points, Nifty Below 25,550 Amid 6 Major Factors (February 2026)

Indian benchmark indices, the Nifty 50 and BSE Sensex, witnessed a sharp decline on Tuesday, February 24, 2026, leading to a massive ₹2.94 lakh crore erosion in investor wealth. The Sensex cracked over 800 points to an intraday low of 82,451, while the Nifty 50 dropped over 150 points, slipping below the crucial 25,550 level. This significant market downturn, driven primarily by heavy selling in IT and auto stocks, has sparked widespread concern among investors across India.

The Catalyst

Several interwoven factors, both domestic and global, converged to create the current market volatility on February 24, 2026. FinScann identifies six major catalysts behind this sharp decline:

• IT Bloodbath Gets New Jolt from AI Disruption: Shares of major Indian information technology (IT) companies, including Tata Consultancy Services (TCS), Infosys, and HCL Technologies, faced intense selling pressure. This was primarily triggered by a significant announcement from AI firm Anthropic. Anthropic stated that its Claude Code tool can be used to rapidly and cost-effectively modernize legacy systems running on COBOL, a programming language dominant in business data processing, including an estimated 95% of ATM transactions in the U.S.. This technological advancement by Anthropic's Claude Code suggests it can automate much of the exploration and analysis typically involved in COBOL modernization, posing a direct threat to the traditional, consultant-heavy business models of IT service providers. This concern led to substantial declines in IT stocks, with IBM's shares alone plunging 13% overnight in the US, marking its largest single-day drop since 2000 and wiping over $31 billion from its market value.
• Trump’s Newest Tariff Threat: Concerns over former US President Donald Trump’s aggressive trade stance deepened the selloff. Following a US Supreme Court ruling that struck down previously imposed tariffs under the International Emergency Powers Act, Trump warned of significantly higher tariffs on any country "playing games". He announced plans to introduce a 15% global tariff under Section 122 of the Trade Act of 1974. This renewed threat creates substantial uncertainty for global trade and investor sentiment.
• US Tech Selloff, Asian Markets Fall: The overnight selloff on Wall Street, fueled by AI concerns and tariff threats, unsettled Asian markets. The S&P 500 fell 1.0%, and the Nasdaq Composite dropped 1.1% due to potential displacement effects of AI on software and other industries. Consequently, Asian stock markets faltered in early trade on Tuesday, with MSCI Asia-Pacific ex Japan Index reversing earlier gains, led by declines in South Korea.
• Weekly Nifty 50 Expiry Adds to Unease: The market decline coincided with the weekly expiry of Nifty 50 derivatives. Such periods often witness increased volatility as traders square off or roll over positions. Unwinding of long bets and fresh hedging activity can exacerbate selling pressure, and with option writers attempting to anchor prices near key strike levels, intraday volatility tends to heighten. Furthermore, thinning liquidity in some stocks during these adjustments can magnify downside moves across the broader market. The 25,500 strike for Nifty puts held the highest open interest, acting as a strong support for the expiry, while 26,000 calls served as strong resistance.
• Weak Rupee vs. Dollar: The Indian Rupee weakened, trading around ₹90.95 against the US dollar on Tuesday. A depreciating Rupee can trigger foreign capital outflows, which puts pressure on equities. Moreover, a weaker Rupee increases the cost of imports, particularly crude oil, thereby raising inflation risks and squeezing margins for companies reliant on imported inputs. This can dampen earnings expectations and overall market sentiment. The Rupee has shown volatility in early February 2026, strengthening to 90.0450 at one point but also experiencing depreciation around the 90.7 to 91 levels against the US dollar.
• Geopolitical Tensions with US-Iran: Prevailing uncertainty was further compounded by escalating geopolitical tensions, specifically a statement from Donald Trump on Friday considering a strike on Iran if a deal with Washington wasn't reached. Iran's Ministry of Foreign Affairs responded, stating any US attack would be an "act of aggression" triggering a response. Such geopolitical risks can significantly impact global markets, particularly oil prices and safe-haven assets like gold.

Financial Forensics

The market saw a substantial loss in investor wealth, indicating broad-based selling pressure across segments. The total BSE market capitalization plummeted to approximately ₹466 lakh crore from ₹469 lakh crore.

Key Index Movements & IT Sector Performance (February 24, 2026)

Index/Stock	Movement	Key Level/Percentage Change
BSE Sensex	Down	800+ points to 82,451
Nifty 50	Down	150+ points to below 25,550
BSE Market Cap	Decline	₹2.94 lakh crore wiped out; total around ₹466 lakh crore
Nifty IT Index	Down	Over 2% to 30,849.05 (some reports indicate nearly 4% intraday)
Infosys	Declined	Nearly 3%
HCL Technologies	Declined	More than 2%
Mphasis	Declined	More than 2%
Persistent Systems	Declined	More than 2%
TCS, Tech Mahindra, Wipro	Declined	Around 2% each
Indian Rupee	Weakened	₹90.95 against US dollar

The IT sector has been under pressure, with the Nifty IT index having slid close to 20% so far in February 2026, influenced by AI-driven business disruptions and high US interest rates. Other broader market indices like Nifty Smallcap 250 and Nifty Midcap 150 also traded with cuts, indicating a wide-ranging impact of the negative sentiment.

Market Impact

The sharp selloff signifies a significant shift in investor sentiment, moving from risk-on to cautious and defensive. The confluence of global trade uncertainties, a revolutionary technological shift impacting the IT sector, and geopolitical tensions created an environment ripe for profit-booking and heightened volatility. This market correction highlights the interconnectedness of global financial systems and how international events swiftly ripple through Indian equities. The auto sector also saw a decline, indicating broad-based concerns beyond just IT.

Key Takeaways for Investors

• Technology Sector Scrutiny: The rapid advancement of AI tools, particularly those impacting legacy systems like COBOL, will continue to reshape the IT services landscape. Investors should closely monitor companies' strategies for AI integration and modernization to assess long-term viability.
• Geopolitical Volatility: Global trade rhetoric and geopolitical flashpoints, such as US-Iran tensions, introduce significant market uncertainty. Your portfolio's resilience to such external shocks is paramount. Diversify and consider defensive plays during heightened geopolitical risks.
• Currency Movements: A weakening Indian Rupee directly impacts import costs and capital flows. Keep an eye on the USD/INR exchange rate, as sustained depreciation can affect corporate earnings and overall market attractiveness for foreign investors.
• Derivatives Expiry Dynamics: Understand that weekly F&O expiry days can amplify market movements due to squaring off positions and hedging activities. Intraday volatility often increases, making disciplined trading crucial.
• Global Cues Remain Critical: Indian markets are not isolated. Developments in US equity markets, global trade policies, and commodity prices (especially crude oil) will continue to be strong determinants of domestic market direction.

FinScann Verdict

The ₹3 lakh crore selloff on February 24, 2026, underscores the fragility of market sentiment in the face of multiple global and technological headwinds. While the immediate trigger points are clear, FinScann believes this correction serves as a crucial reminder for investors to prioritize robust risk management, strategic diversification, and a deep understanding of evolving technological and geopolitical landscapes. The market's ability to rebound will depend heavily on the clarity emerging from US trade policies and the IT sector's adaptation to AI-driven disruption.

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Q: What were the primary drivers of the stock market fall on February 24, 2026? A: The primary drivers included renewed fears of AI disrupting legacy IT systems, former US President Donald Trump's threats of new global tariffs, an overnight selloff in US tech stocks that impacted Asian markets, volatility surrounding the weekly Nifty 50 derivatives expiry, a weakening Indian Rupee, and escalating geopolitical tensions between the US and Iran.

Q: How does the AI impact on COBOL systems affect Indian IT stocks? A: AI tools like Anthropic's Claude Code are designed to automate and modernize legacy COBOL systems more efficiently and cost-effectively. Since many Indian IT companies generate significant revenue from maintaining and modernizing such systems for global clients, this advancement threatens their traditional business models by potentially reducing the demand for human-led consulting and services. This concern led to sharp declines in major Indian IT stocks.

Q: What is the significance of the weekly Nifty 50 expiry for market volatility? A: The weekly expiry of Nifty 50 derivatives, typically on Tuesdays, introduces heightened volatility as traders adjust or close out their futures and options positions. This squaring off of large options positions and fresh hedging activity can lead to larger-than-usual price swings in the underlying index, amplifying any existing selling pressure or market uncertainty.

Q: How do geopolitical tensions in the Middle East influence Indian equities? A: Geopolitical tensions, such as those between the US and Iran, can influence Indian equities through several channels. They often lead to a rise in global crude oil prices, which directly impacts India's import bill and can fuel domestic inflation, squeezing corporate margins and consumer spending. Heightened global uncertainty also tends to trigger a flight to safety, leading to foreign capital outflows from emerging markets like India, putting pressure on the Rupee and stock markets.

Disclaimer: For information only; not investment advice. Stock market investments carry risks. Please consult a SEBI-registered advisor before investing. FinScann assumes no liability for decisions made based on this report.