Nifty IT Slides 4% As AI Concerns Extend Sell-Off In Technology Stocks

Indian IT stocks remained under pressure on February 13, with the Nifty IT index falling about 4% during intraday trade, extending a multi-session decline triggered by global concerns around artificial intelligence-led disruption, according to data from the National Stock Exchange.

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The technology-heavy index slipped to its lowest level since October 2023 and has declined about 17% so far in 2026, as per exchange data. Overall, the wider market has also declined, with the Nifty 50 and Sensex trading in the red.

Heavyweight IT Stocks Lead Declines

All 10 constituents of the Nifty IT index traded in the red on February 13. Infosys emerged as the top loser, falling about 6.3%, while Tata Consultancy Services declined nearly 4.9%, according to NSE data. HCL Technologies dropped around 4.7%, while Wipro and Tech Mahindra were down close to 4.5% each.

Reuters reported that the sell-off in Indian IT stocks followed a sharp overnight decline in U.S. technology shares. The Nasdaq Composite index fell more than 2% on Thursday, weighed down by concerns over shrinking margins and the pace of returns from heavy investments in artificial intelligence.

Global Triggers And Recent Developments

The weakness in IT stocks began earlier this month after U.S.-based AI company Anthropic announced an upgraded version of its Claude artificial intelligence model. Reuters noted that the announcement intensified fears that automation could disrupt India’s labour-intensive IT services model, particularly in areas such as application development, testing and system maintenance.

Adding to the pressure, expectations of a near-term U.S. interest rate cut weakened after stronger-than-expected U.S. jobs data in January, according to Reuters. Higher-for-longer interest rates are seen as a negative for discretionary technology spending in key overseas markets.

Market Data And Sector Positioning

According to Bloomberg data cited in earlier reports, valuations across large-cap IT stocks have compressed sharply over recent weeks. The broader Nifty IT index price-to-earnings multiple has moderated from recent highs as selling pressure persisted.

The exposure of mutual funds to the IT segment still has some distance to cover. The percentage of mutual fund houses' allocation of stocks has been around 8% up until December 2025, compared to their near 9% weight of the BSE 200 index. The Nifty IT stocks in mutual funds have gone from ₹3.16 lakh crore until September 2025 to ₹3.56 lakh crore until December 2025.

The Bigger Picture

Sectoral indices showed a lot of weakness, and metals, cars, and financials also lost value on the stock market. The defensive stocks provided limited support, and market participants were also looking at global tech trends and US macroeconomic releases for further direction, as suggested by Reuters.

The sustained decline in IT stocks has kept the sector among the weakest performers in the current calendar year, with losses deepening as global uncertainty around artificial intelligence adoption and U.S. monetary policy persists.