AI Disruption Fears Trigger $50 Billion Rout in Indian IT Stocks
Indian information technology stocks suffered their worst weekly fall in over 10 months, as fears that artificial intelligence could disrupt the sector wiped out nearly $50 billion in market value so far in February. The Nifty IT index slid 8.2% for the week, its sharpest drop since April 2025, dragging broader markets lower despite optimism around potential U.S. trade deals.
The sell-off intensified after the launch of a new AI tool by Anthropic, which fuelled concerns that rapid adoption of generative AI could upend India’s $283 billion IT services industry. Analysts at J.P. Morgan warned that investors fear Indian IT firms may struggle to meet growth targets as clients reallocate spending in response to AI-driven efficiencies. Portfolio managers also noted that companies have not clearly articulated how AI can be leveraged as an opportunity rather than viewed solely as a threat.
Losses on Friday were led by heavyweights such as Tata Consultancy Services, Infosys, and HCLTech, though stocks recovered from intraday lows as investors bought on attractive valuations. Market participants said the reaction may be overdone, arguing that while AI could reshape the industry and reduce headcounts, IT services companies will remain essential in integrating, customising, and maintaining enterprise software in an AI-driven world.
Pic courtesy: google/ images are subject to copyright
