IT stocks get hit

India’s IT stocks slid sharply today, with the Nifty IT index down about 6% in early trade, marking its steepest fall in months and the weakest session for the index since May 2022, as heavyweights tracked a global tech risk-off move.

Losers were led by Persistent Systems and LTIMindtree, while Infosys, Tata Consultancy Services and Wipro also traded materially lower; by around 10 am, the decline was still broad-based even as the headline Nifty was relatively steady.

The trigger was an overnight selloff in global software and data-analytics names after Anthropic rolled out new productivity tooling around its Claude Cowork “agent” ecosystem, including a legal-focused workflow tool aimed at automating repetitive tasks for in-house teams.

The news hit sentiment hard because it reinforced the market narrative that AI is moving quickly from “assistive” to “substitutive” in parts of knowledge work; US tech benchmarks fell on Tuesday, and a widely tracked basket of US software stocks saw its steepest one-day drop since April’s tariff-led selloff.

For Indian IT services, the concern is not just near-term demand but the medium-term pricing structure: if enterprise clients can automate more work internally using off-the-shelf AI tools, it can compress billing rates in commoditised workstreams and force faster transitions toward outcome-based and platform-led pricing. That said, the move is also a classic “beta” reaction, Indian IT is highly sensitive to US tech sentiment and global discretionary spending expectations, so market swings can overshoot fundamentals on days when Wall Street software is under pressure.

The near-term balancing factor is that enterprise adoption of agentic tools still faces practical constraints (data security, controls, governance and change-management), and Indian IT firms are actively pitching their own GenAI-led productivity and managed-services offerings to defend relevance and margins.

For investors, the next signposts remain deal commentary, pricing discipline, and whether automation translates into higher margins (through productivity) or lower revenues (through volume cannibalisation), a mix that is likely to keep the sector volatile around AI headline cycles.