I would recommend you to open the BIOS menu and check if the hard drive is recognized. If it is not listed there, there may be a connectivity issue or a hard drive problem. If the laptop is under warranty, you should contact the seller. If warranty has expired, I would open the laptop and check the hard drive connection. Connecting the drive in a desktop PC is a good idea and may give you confirmation if the drive has failed.
If the drive is listed in BIOS, but missing in the installation menu, there may be a Windows XP compatibility issue. Please make sure that in the BIOS menu the drive mode is set to IDE. Please check the links below for some more details. You may need to install the Windows XP SATA drivers manually.
Please check the laptop manufacturer’s web page for some additional information.