IT stocks slide: Nifty IT drops 3%, rupee hits 95.58

Early sell-off hits frontline and midcap IT names

Indian IT stocks came under sharp selling pressure in early deals as a mix of global risk-off cues and renewed AI-disruption worries weighed on sentiment. Heavyweights such as TCS, Infosys, HCL Technologies, Wipro and Tech Mahindra featured among the top laggards on benchmark indices. Broader IT counters also slipped, with names such as Aurionpro Solutions, Sonata Software, RateGain, Birlasoft, Silver Touch Technologies, Persistent Systems and Happiest Minds falling as much as 9.84% in early deals. The move extended a phase of weakness that has coincided with volatile global technology markets and cautious client spending commentary.

Market participants linked the decline to a combination of rising crude oil prices, heightened West Asia geopolitical risks and a weaker rupee. Investors also tracked developments in the US and Europe, where uncertainty has been associated with delayed discretionary technology spending and contract renegotiations.

IT indices slide as benchmarks open lower

The sell-off was visible at the index level. The BSE IT index fell 984 points to 27,549 in early trade. On the NSE, the Nifty IT index dropped 1,071 points to 28,255, and in another early reading it was down 2.86% at 28,490.60, placing it among the weakest sectoral performers at the time.

Broader markets also opened lower in the same session. The Sensex fell 780 points to 75,235, while the Nifty dropped 204 points to 23,614, extending the decline for a second straight session that week. The Indian rupee slid to a fresh all-time low of 95.58 against the US dollar, adding to the overall risk aversion visible in equities.

Stock-specific moves: key losers and traded levels

Frontline IT stocks traded in the red, with declines spanning large-cap services firms and mid-tier names. Among the top losers cited in early trade, Infosys fell 3.24% to Rs 1,138.90 and TCS declined 2.76% to Rs 2,326.80. Coforge slipped 3.23%, Persistent Systems fell 3.12% and Mphasis declined 3.06%.

Other major names were also lower: Tech Mahindra fell 2.81%, LTIMindtree declined 2.80%, HCLTech slipped 1.98% and Wipro dropped 1.67%. As the Nifty IT index weakened by nearly 3% in early trade, sector heavyweights such as TCS and Infosys slipped to fresh 52-week lows in that window.

Oil near $105, rupee at 95.58 add macro pressure

Crude oil trading near $105 per barrel became a key macro input for Indian risk assets during the session. Rising oil prices can pressure India’s external balances and the currency, and markets linked the day’s rupee weakness to the broader global setup. While a weaker rupee can, in general, support export-led earnings translation for IT companies, analysts noted that the market focus had shifted to demand risks.

In this session, the rupee’s fall to 95.58 did not translate into positive sentiment for IT exporters. Instead, investors prioritised concerns around slower global growth, delayed discretionary technology spending and the possibility of clients reworking project scope and pricing.

AI-disruption narrative returns to the forefront

AI-led disruption fears were repeatedly cited as a key driver behind the renewed selling. Market commentary referenced rapid advances in artificial intelligence and the potential pressure on traditional outsourcing models that depend on long execution cycles and linear headcount growth. One reported trigger was fresh developments in the AI ecosystem that pushed investors to reassess workflow automation risks.

A Reuters-cited development referenced the release of new plug-ins for Anthropic’s Claude “Cowork” agent that can independently perform tasks in areas such as law, sales, marketing and data analysis. The concern flagged in market commentary was that advanced automation could compress delivery timelines and challenge billable hours in labour-heavy service models, feeding into valuation and growth worries.

Global cues: US tech weakness and West Asia tensions

The weakness in Indian IT stocks was also linked to selling pressure in US technology and software shares and broader global growth worries. Reports pointed to a global sell-off in technology stocks, weakness in American Depository Receipts (ADRs) of Indian IT majors, and a risk-off tone across markets.

Geopolitical risk in West Asia remained a recurring backdrop. The decline was associated with concerns around a fragile US-Iran ceasefire, failed US-Iran peace talks, and reports of military build-up. This environment supported higher crude prices and encouraged investors to cut exposure to risk assets, including IT.

What analysts and market voices said

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, linked the market mood to the Prime Minister’s call for austerity, noting that sectors expected to face reduced consumption were impacted. He said investors should watch the West Asia geopolitical situation and crude prices, and added that some of the most-hit consumption-linked sectors could rebound if crude falls sharply and the austerity package becomes irrelevant.

On the AI question, commentary in the provided material reflected diverging views. One view described the correction as reflecting structural pressure on conventional manpower-led, linear revenue models as “agentic AI” advances. Another view cautioned against panic selling and argued that it may be too early to gauge the impact across all verticals. Separately, Ajit Mishra of Religare Broking pointed to the damage being driven by the AI disruption narrative but said it may be too early to outright reject a comeback, advising lower exposure until clarity emerges over coming quarters.

Recent trend: sustained pressure and 52-week low proximity

The session-level fall added to a broader period of weakness cited in the data. One update said the Nifty IT index has fallen more than 8% over the past 30 days, reflecting sustained pressure amid volatile global conditions and concern around corporate tech spending. Another cited data point said the NIFTY IT index had slid over 10.5% year-to-date and over 10% over the past 30 days (as of Thursday, February 12, early trade level), highlighting that drawdowns have varied by date and measurement point.

Longer-term performance data also underscored the sector’s difficult stretch. Over a two-year period, the Nifty50 IT constituents were reported to have delivered negative returns, with TCS down more than 32%, Infosys down 17%, Wipro down 13% and HCL Technologies down 10%.

Key numbers at a glance

Market impact: what this means for IT investors

The day’s action showed how quickly IT sentiment can turn when global cues, geopolitics and AI narratives align. Even supportive factors for exporters, such as a weaker rupee, were outweighed by concerns around client budgets in key markets like the US and Europe and the possibility of discretionary projects being delayed.

The breadth of declines across large caps and midcaps indicated that investors were reducing exposure at the sector level rather than reacting to company-specific events. Traders also monitored cues such as crude movements, West Asia developments, US economic data, and institutional flows, which were repeatedly cited as swing factors for near-term sentiment.

Conclusion

Indian IT stocks fell sharply as crude near $105, a record-low rupee at 95.58, West Asia tensions and renewed AI-disruption concerns combined to push investors into a risk-off stance. The decline pulled down both the BSE IT and Nifty IT indices and kept several frontline names near recent lows. Market participants are now tracking crude price direction, geopolitical headlines and demand signals from the US and Europe for the next set of cues.