Indian information technology stocks recorded their steepest weekly decline in more than 10 months, as concerns about disruption from artificial intelligence tools wiped an estimated $50 billion off the sector’s market capitalisation in February.
The Nifty IT index fell 8.2 percent for the week, its sharpest drop since April 2025, amid fears that rapid adoption of generative AI could impact India’s $283 billion IT services industry.
Investor sentiment weakened following the launch of a new AI tool by startup Anthropic last month, which triggered a broader global technology sell-off.
Analysts at J.P. Morgan warned that Indian IT firms could face pressure on growth targets if clients reallocate spending toward AI-driven solutions.
On Friday, the index fell as much as 5.2 percent before recovering to close 1.44 percent lower. Tata Consultancy Services declined 2.1 percent, Infosys fell 1.2 percent and HCLTech dropped 1.4 percent.
Some analysts said the sell-off may have been excessive.
“Investors have largely overreacted to the threat posed by these AI tools,” said Piyush Pandey of Centrum Broking, noting that IT services firms remain critical in implementing and maintaining enterprise systems.
J.P. Morgan added that it is overly simplistic to assume AI can fully replace the role of IT services companies, which provide integration and operational support across enterprise software ecosystems.
