Infosys tumbles over 6% as weak global cues, US data and AI fears drag Nifty IT sharply lower
New Delhi: India’s technology stocks faced heavy selling pressure today, pulling the Nifty IT index down nearly 5% and making it one of the worst-performing sectors on Dalal Street. Investors rushed to book profits in frontline IT names, dragging the broader market lower in the process. As a result, benchmark indices such as the Nifty 50 and Sensex also slipped sharply during the session.
Infosys led the decline, falling more than 6 percent. Meanwhile, Tata Consultancy Services (TCS) and HCL Technologies dropped over 4 percent each. Other major IT stocks, including Wipro and Tech Mahindra, also traded deep in the red as negative sentiment spread across the sector.
Strong US Data
To begin with, stronger-than-expected US jobs data triggered concerns in global markets. The robust employment numbers reduced hopes of an early interest rate cut by the US Federal Reserve. When rate cuts appear unlikely, investors typically move away from growth-oriented sectors like technology and shift toward safer assets.
This development directly impacts Indian IT companies because they earn a significant portion of their revenue from the US market. If borrowing costs remain high in the US, companies may delay technology spending and reduce outsourcing budgets. Consequently, investors fear slower revenue growth and weaker deal momentum for Indian IT firms in the coming quarters.
AI Disruption Concerns
At the same time, growing uncertainty around artificial intelligence added to the pressure. Rapid advancements in AI tools have sparked fears that automation could reduce demand for traditional IT services.
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Several AI-driven platforms can now perform coding, data analysis and customer support tasks that previously required large IT teams. As this technology evolves, investors worry that conventional outsourcing models could face structural changes. Although major Indian IT companies are investing aggressively in AI capabilities, the market remains uncertain about how this shift will impact future earnings. This uncertainty has intensified selling in the sector.
Global Tech Weakness
Adding to the strain, global technology stocks have recently witnessed a downturn, particularly in the US markets. Weakness in international tech indices spilled over into Asian markets, including India.
Because Indian IT stocks closely track global technology trends, negative cues from overseas markets quickly affected domestic sentiment. Investors reacted to the global sell-off by trimming exposure to Indian IT names, which accelerated the decline.
Heavyweights Under Pressure
The fall was broad-based, but large-cap stocks absorbed the maximum impact. Infosys emerged as the biggest loser among frontline players, while TCS hovered near its 52-week low. HCL Technologies also recorded steep losses during the session.
Collectively, the sharp sell-off wiped out nearly ₹1.3 lakh crore in market capitalisation from the IT sector in a single day. The scale of the decline reflects the intensity of investor concerns surrounding global macroeconomic trends and technological disruption.
Analysts Advise Caution
Despite the sharp fall, analysts point out that the correction appears sentiment-driven rather than triggered by company-specific weaknesses. No major earnings downgrades or operational setbacks have surfaced so far.
However, experts highlight three key risks that continue to weigh on the sector. First, delayed US rate cuts could dampen corporate technology spending. Second, AI-led automation may reshape traditional outsourcing revenue streams. Third, ongoing volatility in global tech stocks could keep valuations under pressure.
Some market participants believe the correction may create long-term opportunities if business fundamentals remain stable. Others suggest waiting for clearer signals on global demand and deal pipelines before making fresh investments.
Outlook Ahead
For now, the IT sector is likely to remain volatile as investors monitor global economic indicators and Federal Reserve commentary. The market will also closely watch updates from leading IT companies regarding order wins, revenue guidance and AI integration strategies.
While India’s IT industry continues to hold strong long-term potential, near-term uncertainty surrounding global growth and technological shifts may keep stocks under pressure. Investors will need to balance optimism about digital transformation with caution about evolving risks in the global environment.
