Indian IT Stocks Decline Amid AI Disruption Concerns and US Jobs Data

Indian information technology stocks experienced a significant decline on February 12, with the Nifty IT index falling over 4% to 33,588.80 in early trading. This downturn was influenced by concerns over potential disruptions from artificial intelligence and stronger-than-expected US jobs data, which dampened expectations for near-term interest rate cuts.

Major IT companies such as Infosys, Tata Consultancy Services (TCS), Tech Mahindra, and Wipro saw their shares drop by approximately 4% each. Notably, TCS and Wipro reached their 52-week lows during the session.

The broader market also reflected this trend, with the SENSEX falling as much as 395 points and the NIFTY50 index touching an intraday low of 25,836.

Analysts attribute the sell-off to investor concerns about AI's potential to disrupt traditional business models in the IT sector. Additionally, the robust US employment data has led to speculation that the Federal Reserve may delay anticipated interest rate cuts, further impacting market sentiment.

Despite the downturn in IT stocks, select banking, financial services, and FMCG shares showed buying interest, indicating a mixed response across different sectors in the market.