Nifty IT slides as AI fears hit Infosys, TCS in 2026

Nifty IT stays the weakest pocket despite broader market recovery

Shares of information technology companies remained under pressure in Thursday’s trade even as the broader market recovered. The Nifty IT index continued to be the worst-performing sectoral index on the NSE. Weakness in global technology stocks added to the cautious tone. But the sharper theme investors focused on was disruption risk from increasingly capable artificial intelligence models and tools. The immediate reference point was Anthropic’s latest announcements around its Claude models and coding products. In early trade updates, heavyweights such as Infosys and HCL Technologies were among the largest drags on the benchmark.

Thursday snapshot: index and key losers

At around 11:44 am, the Nifty IT index was down 1.3% at 27,901. Infosys fell 2.3% and HCL Technologies declined 2.1%, making them the top two losers on the Nifty at that point. The sector’s underperformance stood out because the broader market had shown signs of stabilising. The moves suggested selling pressure in IT was being driven by sector-specific worries rather than only macro factors. Market participants tracked the development as part of a longer spell of weakness, rather than a one-off dip.

Anthropic’s Claude Fable 5 adds to AI disruption debate

Anthropic on Tuesday unveiled Claude Fable 5, described as a new “Mythos-class” artificial intelligence model. The company said the model delivers a significant jump in software engineering and knowledge-work capabilities. The announcement intensified concerns that AI tools could automate parts of what IT services firms traditionally bill for. Investors have been assessing whether higher-capability models will reduce demand for routine services and compress margins in certain workstreams. The uncertainty has been especially sensitive for Indian IT companies due to their large exposure to global enterprise clients.

Fifth straight session sell-off: the sharper Tuesday drop

In another session highlighted in the updates, Indian IT stocks extended their sell-off for a fifth straight session on Tuesday. The Nifty IT index plunged more than 5% by afternoon, with the index down 5.1% around 12:50 pm and again marked as the worst-performing sector. Tech Mahindra fell 6.7% to Rs 1,344.7, while HCL Technologies dropped 6.5% to Rs 1,333.7. Infosys declined 4.6% to Rs 1,266, TCS slipped 4% to Rs 2,569.9, and Wipro was down 3% at Rs 199.8. The stated trigger was renewed concern over AI-led disruption.

Claude Code and the COBOL modernisation concern

The sell-off was linked to claims that Anthropic’s Claude Code tools can sharply reduce the cost and complexity of modernising legacy software systems. Anthropic said Claude Code could automate much of the exploration and analysis that drives the complexity of COBOL modernisation. COBOL modernisation is a key business area for IBM, and more broadly an established bucket of work across the enterprise technology ecosystem. The market reaction reflected a fear that automation could change pricing dynamics and reduce the volume of billable work. Separately, another update noted IT stocks faced heavy selling after Anthropic said its tool can be used to modernise legacy systems that run on COBOL.

Friday pressure: rate-cut expectations and broader risk-off mood

IT stocks continued to trade in the red on Friday as the sector extended its fall. Along with AI disruption concerns, fading expectations of an early interest rate cut by the US Federal Reserve were cited as another factor weighing on sentiment. At 9:50 am, the Nifty IT index slumped 4.59%, or 1,520 points, to 31,639. In that trade window, Infosys fell 85 points, or 6.13%, to 1,299 on the NSE, while TCS declined 4.77% to 2,619. HCLTech and Wipro dropped 4.48% and 3.64%, respectively, and Tech Mahindra was lower by 2.66%. In the mid-tier space, Coforge tumbled 1,345 points, or 5.32%, Persistent lost 3.16% to 5,279, and LTIMindtree slipped 3.62% to 5,023.

Broader damage: wealth erosion, weekly hit, and index trend

One of the updates said the sectoral index had tumbled over 15% and wiped out Rs 5.08 lakh crore of investor wealth since the sell-off began with the launch of Anthropic’s new tools on February 4. Another update said Indian software exporters fell a further 2% on Friday, ending a volatile week in which $12.5 billion was wiped off market valuations. The Reuters update also said the IT index fell about 7% over the week, its largest weekly decline in more than four months, and that all ten components of the IT sub-index ended Friday lower. Separately, data cited for February 12, 2026, said the Nifty IT index had slid over 12.16% year-to-date and more than 10% in the past 30 days, and was trading 4.48% lower at 33,522.50 in early trade.

Key market moves mentioned across sessions

Why investors are watching AI tools closely

Across the updates, the common thread was the fear that AI adoption could reduce the need for some of the routine work Indian IT companies do for global clients. Claims about automating legacy modernisation work, and the broader push to automate professional tasks, have heightened debate on how outsourcing-heavy business models might be affected. The price action also showed sensitivity to global technology stock moves and broader risk sentiment. For Indian IT majors, these concerns tend to translate quickly into valuation pressure because the sector’s earnings outlook is closely tied to global enterprise spending cycles.

What to track next

The sector’s moves have been closely linked to developments around Anthropic’s Claude models and tools, and to global tech-market sentiment. Investors are also watching how quickly AI tools move from demonstrations into enterprise-scale adoption. Another factor highlighted in the updates is the path of US interest rates, given the role of macro expectations in risk appetite. For now, the reported sessions show that IT has remained among the weakest parts of the market during downswings, with broad-based declines across constituents.