Indian IT stocks saw a sharp sell-off on Tuesday morning, with shares of major companies falling together, signalling that something more than routine profit-booking was at play. Stocks of Infosys, TCS, HCLTech, Tech Mahindra and Wipro all slipped steeply, dragging the entire sector lower.
By 10:50 am, Infosys shares were down over 7 percent, while TCS, HCLTech and Tech Mahindra had fallen close to 6 percent each. Wipro also declined around 4 percent. While the fall appeared sudden in Indian markets, the trigger had emerged overnight in the United States.
Why are IT stocks falling today?
The weakness followed a sharp drop in the Nasdaq, where global technology and software stocks came under pressure. Investor sentiment was hit by fresh concerns around artificial intelligence and its potential impact on the traditional outsourcing model that Indian IT firms depend on.
ALSO READ | Textile shares jump 20% after India-US trade deal
The worry deepened after AI company Anthropic announced new tools capable of handling tasks such as document reviews and data analysis work that global clients often outsource to Indian IT service providers. The development sparked fears that AI could reduce demand for back-end services.
Adding to the pressure, shares of Infosys and Wipro listed in the US fell sharply overnight. These US-listed shares, known as American Depositary Receipts (ADRs), often act as an early signal for Indian markets. The weak ADR performance set the tone even before domestic trading began.
Global cues add to pressure
Indian IT stocks were already under strain due to high valuations, slow deal ramp-ups, shrinking discretionary spending, and cautious commentary from US and European clients. The global tech sell-off only accelerated investor exits.
ALSO READ | Strong momentum in stock market: 6 stocks to watch today
Mid-tier IT stocks were hit even harder, falling between 4 and 7 per cent as traders cut exposure and stop-loss orders were triggered. The Nifty IT index emerged as one of the worst-performing indices of the session.
Market participants expect volatility in the near term as investors look for clarity on global tech spending trends, the speed of AI adoption, and whether Indian IT companies can sustain deal momentum.
While Indian IT firms continue to invest in cloud, automation and AI-led services, Tuesday’s sharp fall shows that global tech sentiment remains a key risk factor. For now, the spillover from US markets is enough to keep the sector under pressure and traders cautious through the session.
