Indian benchmark indices, the Sensex and Nifty, experienced a significant downturn on November 4, 2026, retreating sharply from their day's highs. The Sensex tumbled 796 points from its peak of 77,396 to a low of 76,604, while the Nifty shed 250 points, falling from 23,946 to 23,696.
IT Stocks Lead the Market Decline
The primary catalyst for this market correction was a widespread sell-off in the information technology (IT) sector. The Nifty IT index crashed 633 points to 31,917, making IT shares the sole sectoral losers in the Indian market during this period. Similarly, the BSE IT index plummeted 685 points from its high of 30,742 to 30,057.
Major IT players on the Sensex, including Tata Consultancy Services (TCS), HCL Technologies, Infosys, and Tech Mahindra, bore the brunt of the decline, with their shares falling by up to 2.75%.
US Midterm Elections Spark AI Spending Concerns
The market's apprehension stemmed from early indications of a potential Democratic victory in the ongoing US midterm elections. Analysts suggest that a Democratic win could lead to a slowdown in artificial intelligence (AI) spending, particularly impacting Asia's tech-heavy markets, which rely significantly on US contracts and investments.
This sentiment was mirrored across other Asian markets. Japan's Nikkei 225 recorded a substantial 4.8% drop, its largest in months, while the Taiwan Weighted index fell 3.28%, and the broader Topix First Section declined by nearly 2%. Tech giants and semiconductor firms like SoftBank Group, Tokyo Electron, Advantest, and Screen Holdings all saw significant losses, ranging from 4% to nearly 6%.
“The crash in tech stocks came amid early signs of a Democratic win in the US midterm elections, which is expected to slow down artificial intelligence spending in Asia's tech-heavy markets.”
Despite the tech sector's struggles, other sectors showed resilience. The BSE Capital Goods index emerged as the top gainer, rising 1856 points to 72,251. Other indices like Consumer Durables, Metal, and Oil & Gas also posted gains, helping to mitigate the overall market slide to some extent.