IT Stocks Slide Sharply As Global Tech Selloff Deepens on AI Concerns

Indian IT stocks declined steeply on Wednesday, February 4, with sector majors losing up to 6%, mirroring a sharp overnight fall in global technology stocks after fresh developments in artificial intelligence raised concerns across markets.

Data from the National Stock Exchange (NSE) showed Infosys shares falling as much as 6% in intraday trade, marking their lowest level in nearly three months. Tata Consultancy Services (TCS), the country’s largest IT services exporter by market capitalisation, also declined close to 6% during the session. Wipro shares dropped 6.7%, while HCL Technologies fell 6.44%.

The broader Nifty IT index was down 5.99% in early trade, with all its constituents trading in the red, according to NSE data.

Global Cues Weigh on Domestic IT Stocks

The decline in Indian IT stocks followed a sharp selloff in global technology shares overnight. According to Reuters, U.S. technology stocks ended Tuesday’s session lower amid investor concerns that rapid advancements in artificial intelligence could disrupt traditional technology services businesses. Gartner shares fell 21% in the U.S. market, while Nvidia, Meta Platforms, and Microsoft declined by more than 2% each. Oracle shares ended the session down 3.4%, as per Reuters market data.

Asian technology stocks also came under pressure in early trade. Bloomberg reported that Sydney-listed cloud accounting firm Xero slid as much as 15%, marking its steepest intraday fall since March 2020. In other Asian markets, Hong Kong-listed Kingsoft Cloud Holdings Ltd. and Japan’s Nomura Research Institute Ltd. declined by at least 6% each.

AI Developments Trigger Sector-Wide Reaction

According to a Reuters report, the global technology selloff was triggered by the release of new artificial intelligence capabilities by U.S.-based AI company Anthropic. The company introduced new plug-ins for its Claude Cowork agent that enable automated handling of tasks across functions such as legal work, sales, marketing, and data analysis.

This has led to concerns among investors about the possible effects of highly advanced AI technology on conventional IT services and outsourcing, which are the primary sources of revenue for Indian IT companies.

Impact on Indian IT Majors

The Indian IT industry earns a substantial portion of its revenues from foreign countries, especially the U.S. As per company disclosures and data from the Ministry of Commerce and Industry, the U.S. remains the largest export destination for India’s IT and business services sector.

The sharp fall in global technology stocks, combined with concerns around AI-led automation, weighed on investor sentiment towards Indian IT exporters during Wednesday’s session. Market data available from the NSE showed that there was heavy selling pressure on both large-cap and mid-cap IT stocks, thus affecting the sharp fall in the sectoral index.

Broader Market Context

The selling pressure in IT stocks happened despite mixed trends in the overall Indian equity market. Although market indices revealed stability in early trade, the IT sector experienced poor performance due to its high sensitivity to global events, particularly in the U.S. technology sector.

According to Bloomberg and Reuters, the global reaction highlights the increasing influence of artificial intelligence developments on equity markets, especially for companies with business models closely linked to technology services and digital transformation.

By mid-morning, the Indian IT stocks continued to face selling pressure, thereby indicating the persistence of concerns triggered by global market trends.