Market Update: Top Valuations Erode Amid IT Rout The Indian equity market witnessed a significant contraction in the second week of February 2026. The combined market valuation of six of the top 10 most valued firms plummeted by more than **Rs 3.12 lakh crore**. This sharp erosion was primarily driven by a massive sell-off in the information technology sector, which faced structural concerns and global macro pressures. The benchmark BSE Sensex closed at **82,626.76**, recording a single-day drop of **1,048 points** or **1.25%** on Friday. Similarly, the Nifty 50 slipped **336 points** to end at **25,471.10**. Over the last two trading sessions of the week, investor wealth worth approximately **Rs 9.52 lakh crore** was wiped out across the exchange. IT Majors Lead the Decline Technology heavyweights emerged as the biggest laggards. Tata Consultancy Services (TCS) and Infosys saw their market capitalizations shrink significantly as the Nifty IT index tumbled nearly **5%** in a single session. **TCS** valuation dropped by over **Rs 1.10 lakh crore**, with its share price hitting a 52-week low near **Rs 2,750**. The company’s market cap fell below the psychological **Rs 10 lakh crore** mark during the week. **Infosys** followed a similar trajectory, with its market value eroding by approximately **Rs 75,000 crore**. The stock crashed over **6%** to trade near **Rs 1,299** as investors reacted to the shifting landscape of service delivery. Key Performance Indicators The downturn was not limited to the IT giants. Other major firms in the top 10 also saw substantial value erosion: * **Hindustan Unilever (HUL)** and **Eternal** saw valuations drop by nearly **4%** each. * **HCLTech** and **Wipro** recorded declines of **4.48%** and **3.64%** respectively. * **Tech Mahindra** slipped by **2.66%**, contributing to the broader sectoral drag. Triggers for the Bearish Trend The market sentiment was dampened by a combination of domestic and international factors. A primary concern for the technology sector is the "Revenue Deflation Risk" prompted by rapid advancements in automation. The launch of advanced autonomous agents by global startups has sparked fears of shrinking billable hours for traditional IT services. Externally, strong employment data from the United States has reduced expectations for early interest rate cuts by the Federal Reserve. This has kept US bond yields elevated, leading to significant capital outflows. Foreign Institutional Investors (FIIs) offloaded equities worth **Rs 7,395.41 crore** in a single day, far outstripping the **Rs 5,553.96 crore** in purchases made by domestic institutional investors. Sectoral Outlook and Valuations Despite the volatility, the broader market remains anchored by the financial sector. **Bajaj Finance** and **ICICI Bank** provided some support during the mid-week sessions, preventing a deeper collapse of the headline indices. The current correction is being viewed by analysts as a structural reset in valuations. While the IT sector navigates a transition toward intellectual property-led models, the total market capitalization of all BSE-listed firms now stands at approximately **Rs 465.46 lakh crore** ($5.13 trillion).