Tech Rout Weighs on Dalal Street as IT Index Cracks in Ongoing Session

Indian equity benchmarks were trading lower on Thursday as a sharp sell-off in information technology stocks weighed heavily on overall market sentiment, pushing the IT index to multi-month lows during the session.

As of morning trade, the Nifty 50 was hovering near 25,870, down about 0.3%, while the BSE Sensex was trading around 84,000, lower by over 200 points. The decline was largely driven by steep losses in IT heavyweights, which dragged benchmark indices into the red.

Nifty IT Tumbles Around 4% In Intraday Trade

The Nifty IT index slid nearly 4–4.5% during the session, making it the worst-performing sector on the NSE and pushing it to levels last seen around four months ago.

All major constituents were under pressure:

• Tata Consultancy Services (TCS) fell around 4–5%
• Infosys slipped nearly 4.5%
• HCL Technologies declined close to 4%
• Wipro, Tech Mahindra, and LTIMindtree were down 4–5%

The sharp intraday fall resulted in an estimated ₹1.3 lakh crore erosion in market capitalisation across leading IT stocks, intensifying pressure on headline indices due to the sector’s heavy weightage.

Why IT Stocks Are Under Pressure? 

Global rate expectations hit tech valuations

IT stocks came under selling pressure after stronger-than-expected economic data from the US dampened hopes of an early interest rate cut by the Federal Reserve. Higher-for-longer rate expectations tend to hurt growth-oriented sectors like technology by compressing valuation multiples and weakening demand visibility.

Given that Indian IT companies derive a significant share of revenues from overseas markets, particularly North America, global macro cues played a major role in today’s sell-off.

AI disruption concerns add to uncertainty

Investor sentiment also remained cautious amid rising concerns that rapid advances in artificial intelligence could disrupt traditional IT services models. Market participants are increasingly factoring in the risk that automation and generative AI tools may reduce demand for labour-intensive outsourcing work, a core revenue driver for Indian IT firms.

Global tech weakness spills over

The weakness in domestic IT stocks mirrored softness in global technology shares, with investors reassessing growth prospects for the sector amid tighter financial conditions and fast-changing technology trends. The broader market remains weak.

Beyond IT, Broader Market Sentiment Remained Cautious:

• Mid-cap and small-cap indices were both down around 0.6–0.7% in intraday trade
• Nine out of sixteen NSE sectoral indices were trading in the red
• Defensive pockets such as FMCG and select banking stocks offered limited support

The overall tone suggested continued risk aversion rather than stock-specific selling.

Market participants are closely tracking global macro data, currency movements, and commentary from IT companies on deal pipelines and AI integration. Analysts say near-term volatility in IT stocks could persist unless there is clarity on global rate trajectories and how quickly firms can adapt their business models to AI-led changes.

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