Why Are IT Stocks Falling Today? AI Fears and US Data Drag Nifty IT

IT Stocks Falling sharply today reflects a combination of global and domestic triggers that pushed the Nifty IT index down nearly 5.5% in a single session. The decline marked one of the steepest single-day falls in recent months.

Large-cap companies such as Infosys, Tata Consultancy Services (TCS), Wipro, Tech Mahindra, Coforge, and Sonata Software declined between 5% and 8%. The fall in IT shares also weighed on broader benchmark indices.

This article explains the key factors behind the decline, including AI concerns, US data impact, and global technology sector weakness.

Nifty IT Index Decline: What Happened?

The Nifty IT index fell around 5.5% during the trading session. Mid-cap IT stocks recorded sharper losses compared to large-cap peers.

The decline comes amid:

• Weak global technology stocks
• Stronger US economic data
• Ongoing concerns around artificial intelligence adoption
• Valuation adjustments in export-focused sectors

The IT sector has significant exposure to overseas markets, especially the United States. As a result, global developments often influence Indian IT stock performance.

AI Disruption and Its Impact on Indian IT Companies

Artificial intelligence developments have increased concerns about structural changes in the IT services industry.

Recent progress in generative AI platforms has led to discussions around:

• Automation of routine IT services
• Reduced demand for traditional application maintenance
• Pressure on outsourcing contract pricing
• Shift in enterprise technology spending

Indian IT companies generate a large share of revenue from services such as application development, infrastructure management, and consulting.

As AI tools become more efficient, investors are assessing how these changes may affect service demand. This reassessment has contributed to volatility in IT stocks.

US Data and February Jobs Data Influence

Stronger-than-expected US data played a key role in the selloff.

Key figures from February jobs data:

• Non-farm payrolls: Around 130,000 jobs added
• Unemployment rate: Approximately 4.3%
• Dollar index: Trading near 97

Stronger US employment data can influence expectations around Federal Reserve rate policy. When rate cut expectations are reduced, global liquidity conditions may tighten.

Indian IT companies earn more than half of their revenue from the US market. Therefore:

• Changes in US macroeconomic indicators affect revenue outlook
• Dollar movement influences export earnings
• US corporate spending trends impact order flows

As US technology stocks reacted to macroeconomic data, Indian IT stocks also saw selling pressure.

Global Tech Rout and Nasdaq Effect

Indian IT shares often track trends in US technology indices such as the Nasdaq Composite.

When US tech stocks face pressure due to:

• Earnings concerns
• Interest rate expectations
• Valuation corrections
• AI-related business model shifts

Indian IT stocks tend to mirror the movement.

Recent weakness in global technology shares added to the downward momentum in the domestic IT sector.

Infosys Down and Other Stock-Wise Performance

Several frontline IT stocks recorded notable declines.

Major IT Stocks Performance

Mid-cap IT stocks experienced sharper corrections due to higher volatility and lower liquidity levels.

The broad-based decline led to a significant erosion in market capitalisation within a single session.

Broader Market Impact

The weakness in IT stocks affected benchmark indices.

• Nifty 50 declined around 0.5–0.6% near the 25,800 level
• BSE Sensex fell approximately 0.7%
• Nifty IT index is down nearly 13% in February so far

As IT has a meaningful weight in headline indices, sharp moves in the sector influence overall market performance.

Key Factors Behind IT Stocks Falling

The current decline reflects multiple factors rather than a single trigger:

• AI disruption concerns in traditional IT services
• Strong US data influencing rate cut expectations
• Weak global technology stocks
• Valuation adjustments in export-driven sectors

These combined factors resulted in broad selling across both large-cap and mid-cap IT names.