IT stocks slump; Infosys dives over 7%

Shares of Infosys plunged 7.19%, Tata Consultancy Services tanked 6.95%, LTIMindtree dropped 5.51%, and Hexaware Technologies tumbled 4.98% on the BSE.

The stock of Persistent Systems edged lower by 4.69%, HCL Technologies declined 4.22%, Tech Mahindra lost 4.12%, and Wipro fell by 3.73%.

The combined market valuation of these firms eroded ₹1.66 lakh crore. The BSE IT index tumbled 5.49% to 35,109.51. “IT stocks faced sharp selling pressure, tracking weakness in global technology shares.

“Sentiment in the sector deteriorated after AI startup Anthropic unveiled an end-to-end workflow automation productivity tool, rekindling concerns that rapid advances in AI could disrupt traditional software business models and weigh on industry-wide profitability,” Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm, said.

In the U.S. market, the Nasdaq Composite index tumbled 1.43% on Tuesday (February 3).

IT stocks were the biggest drag for the markets. After a remarkable rally in the previous trade, the 30-share BSE Sensex ended 78.56 points, or 0.09%, higher at 83,817.69. The 50-share NSE Nifty went up 48.45 points or 0.19% to settle at 25,776.

“Overall upside remained limited due to weakness in IT stocks amid concerns over reduced demand for traditional outsourcing following Anthropic’s introduction of new AI-driven automation tools,” Vinod Nair, Head of Research, Geojit Investments Ltd, said.