Indian IT stocks remained under severe pressure this week as AI disruption fears and fading hopes of US rate cuts triggered aggressive selling across the sector.
At Friday’s intraday lows, the combined market capitalisation of the top five domestic IT companies — Tata Consultancy Services, Infosys, HCL Technologies, Wipro and Tech Mahindra — declined by nearly ₹3,11,873 crore over the past week.
The technology pack bore the brunt of the sell-off.
• Nifty IT index fell 5.2 percent to an intraday low of 31,422 on Friday
• Index down 12 percent in three sessions
• Month-to-date fall at 15.40 percent — steepest since March 2020
• Sensex and Nifty 50 both slipped over 1 percent at intraday lows
Infosys, Oracle Financial Services, TCS and Wipro touched fresh one-year lows during the session.
The wealth erosion was led by frontline IT names:
• TCS: Market cap down ₹1,28,800 crore; stock down 12.12 percent
• Infosys: Market cap down ₹91,431 crore; stock down 15 percent
• HCL Technologies: Market cap down ₹53,647 crore
• Wipro: Market cap down ₹22,762 crore
• Tech Mahindra: Market cap down ₹15,233 crore
TCS also slipped to the fifth-most valued listed company during the week.
The sell-off gathered pace after US-based AI startup Anthropic announced a new tool capable of automating tasks across:
• Legal services
• Sales and marketing
• Data analysis
• Enterprise workflows
These are key revenue streams for Indian IT services firms, raising concerns over pressure on traditional headcount-driven outsourcing models. Analysts say clients are increasingly shifting towards outcome-based pricing, which could weigh on margins and deal wins.
Stronger-than-expected US jobs data has reduced expectations of near-term rate cuts by the Federal Reserve.
Higher-for-longer interest rates could:
• Keep technology valuations under pressure
• Raise client cost concerns
• Slow discretionary IT spending
Four major US technology companies are planning to spend more than $650 billion in 2026 on data centres and AI chips.
While AI is widely seen as transformative, the scale of capital expenditure amid uncertain returns has sparked concerns of a potential technology bubble, drawing comparisons with the early-2000s dotcom crash.
