Infosys, TCS, HCL Tech Shares Fall Up To 9% - Why Indian IT Stocks Are Falling Today

Indian IT stocks were battered in early trade on February 4, as an overnight sell-off in US technology shares spilled over to domestic markets. Investors were rattled by fears that rapid advances in artificial intelligence (AI) could disrupt the traditional IT services model.

Shares of frontline IT companies fell across the board. Infosys fell up to 8.88 per cent to Rs 1,510.10 apiece on the NSE, while Tata Consultancy Services (TCS) fell 7.40 per cent to Rs 2,986 per share. HCL Technologies declined nearly 6.50 per cent to an intraday low of Rs 1,586 and Wipro slipped over 4.50 per cent to Rs 226.26. IT stocks in the mid-cap space such as Coforge, LTIMindtree, Mphasis, Persistent Systems and Oracle Financial Services Software also fell between 4 per cent and 6 per cent.

The Nifty IT index, as a result, plunged as much as 7.27 per cent, or 2,802.25 points, to hit an intraday low of 35,809.50.

Why Indian IT Stocks Are Falling Today

Market experts said the sell-off was driven by renewed concerns over AI-led disruption, following the launch of new automation tools for the Claude platform by US-based artificial intelligence firm Anthropic. According to Reuters, the company has released plug-ins for its Claude “Cowork” agent that can independently perform tasks in areas such as law, sales, marketing and data analysis, functions that have traditionally required significant human intervention.

“Indian IT stocks fell, tracking Wall Street losses after a sell-off in US technology stocks in the previous trading session. Investors are worried that AI is creating more competition for IT companies after Anthropic’s launch of a legal tool for its Claude AI chatbot. We believe this is too early to gauge the impact, as it may not impact all the verticals,” said Sumit Pokharna, VP–Fundamental, Kotak Securities.

India, often viewed by global investors as an “anti-AI trade” due to its labour-intensive IT services model, bore the brunt of the sentiment shift. Infosys and Wipro American Depository Receipts (ADRs) had declined overnight by around 5 per cent each, setting the tone for today’s sell-off back home. Analysts said service-led business models dependent on long execution cycles and linear headcount growth are especially vulnerable in the near term, as AI tools increasingly automate routine enterprise functions.

Global Tech Sell-Off

The weakness was not limited to Indian markets. Tech stocks crashed across global bourses on February 3. Among the several large-cap US technology stocks that ended lower, Gartner tumbled 21 per cent, while Nvidia, Meta and Microsoft lost between 2 per cent and 3 per cent each. Oracle declined 3.37 per cent.

In Asia-Pacific markets, cloud accounting firm Xero plunged as much as 15 per cent in Sydney, its biggest fall since March 2020, while Hong Kong-listed Kingsoft Cloud Holdings and Japan’s Nomura Research Institute crashed at least 6 per cent each.

Indian IT Sector Outlook 2026

From a technical perspective, the damage to Indian IT stocks appears significant. “From a technical standpoint, the damage is significant. The index decisively breached its 200-day simple moving average on heavy volumes, forming a large bearish gap-down. This gap now represents a strong overhead resistance zone around 37,200. Momentum indicators deteriorated rapidly, with the 14-period RSI sliding from a neutral 54 into oversold territory, reflecting heightened fear and capitulation,” said Sachin Gupta, Vice President – Research at Choice Equity Broking.

Gupta cautioned that investors may need to rethink their approach in the current market environment. “The market narrative has shifted decisively. The earlier ‘buy-on-dips’ approach is no longer valid, and the trend now favors a ‘sell-on-rallies’ strategy. The index is likely to drift lower in the near term, with the 35,500–34,800 zone emerging as the next critical support area where attempts at stabilization may occur amid ongoing AI-led disruption,” he said.