IT Stocks Enter Bear Market; Nifty IT Slumps 5% as TCS Hits 52-Week Low

Indian IT stocks plunged sharply on Thursday as global macro cues and rising concerns over artificial intelligence-related disruption intensified selling pressure. The broader market also felt the impact, but the tech sector led losses for the second consecutive session.

By early afternoon trade, the Nifty IT index was down more than 5%, sliding to around 33,500-33,600 points, its lowest level in over four months and marking a sustained decline from recent highs. 

Heavy losses across major tech counters, TCS, Infosys, HCLTech, among the worst hit.

The sell-off was broad-based among major software exporters:

• Tata Consultancy Services (TCS) shares fell about 5.5%, hitting a fresh 52-week low and dragging the company’s market capitalization below the ₹10 lakh crore mark. 
• Infosys Ltd was down around 5.7% in intraday trade. 
• HCL Technologies dropped more than 4%. 
• Other names, including Wipro, Tech Mahindra, Coforge, and LTIMindtree, experienced declines ranging between roughly 4–6%, with some hitting multi-month lows. 

The broad decline in share prices erased a significant amount of wealth from the sector, with analysts tracking the session estimating that Indian IT stocks collectively lost over ₹1.3 lakh crore in market value as a result of the downturn. 

Broader Indices Also Feel The Heat

The sharp fall in IT counters contributed to weakness in the overall market:

• The S&P BSE Sensex slipped more than 400 points, trading below 84,000, while
• The NSE Nifty 50 dropped towards 25,830, both benchmarks reflecting heightened risk-off sentiment among investors. 

The Nifty IT index’s decline of over 5% made it the top sectoral loser of the day among all industry groups on the exchanges. 

Drivers Of The Sell-off: 

Two key factors behind the intense selling:

• Stronger-than-expected U.S. jobs data released this week dimmed hopes of a near-term interest rate cut by the Federal Reserve, leading investors to reprice growth-sensitive stocks, including technology and IT services shares. 
• Renewed concerns over artificial intelligence (AI) disruption played a significant role. Developments around advanced AI tools capable of automating complex business workflows, particularly those geared toward corporate operations, have heightened anxiety about the potential erosion of traditional IT services revenue models. 

The combination of macro and technology-structural fears has led to a sustained run-down in IT valuations, with the Nifty IT index already down roughly 11% so far in 2026 after experiencing a double-digit fall last year. 

Indian IT companies have historically been among the most valuable segments of the Indian equity market, drawing strong institutional interest due to robust revenue streams from overseas contracts. However, the recent run of losses has seen some of these bellwethers fall out of top market-cap rankings, with TCS in particular moving down the list relative to banking and financial firms.

The sell-off comes amid a broader rotation by investors away from high-beta, growth-oriented stocks toward sectors perceived as more defensive, following a period of strong gains in equities earlier in the year.

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