Anthropic’s AI tool leads a global tech selloff that causes Infosys, TCS, and other IT stocks to fall as much as 6%.
Indian IT stocks tumbled sharply after a global tech selloff, as fears grew that rapid advances in artificial intelligence could disrupt traditional software and services businesses.
Global Tech Selloff Hits Indian IT Stocks
Amid worries that artificial intelligence may exacerbate competitiveness, Indian IT businesses’ stock fell in trading on February 4 along with their international counterparts.
Early Wednesday trading saw the Nifty IT index drop about 6% to 36,393.70 due to the steep decline in share prices.
Major IT Stocks See Sharp Losses
Shares of Mphasis, Tech Mahindra, Tata Consultancy Services (TCS), and HCL Technologies fell by about 6% apiece, while shares of Persistent Systems, LTI Mindtree, Coforge, and Infosys all fell by more than 6%.
Each share of Wipro dropped more than 4 percent. As of 9.20 am, the major indices, the Sensex and Nifty, are seeing the biggest losses due to the heavyweight IT stocks. The market’s top losing sectoral index at the moment is the Nifty IT index.
📉 Indian IT Stocks Under Pressure
- Date: February 4
- Nifty IT Index: Down ~6%
- Top Losers: Infosys, TCS, Tech Mahindra, HCL Tech
- Market Impact: Dragged Sensex & Nifty lower
- Reason: AI-led global tech selloff
Job Market and Sector Concerns Rise
Amid worries about jobs in the sector, Info Edge, the parent firm of Naukri.com, too saw a 5% drop in morning trading.
Following Anthropic’s introduction of a legal tool for its Claude AI chatbot, Wall Street ended yesterday’s session significantly down as investors continued to worry that AI was increasing competition for software developers.
Anthropic’s AI Tool Triggers Global Fears
Last Wednesday, Anthropic, an AI company, released plug-ins for its Claude Cowork agent that can automate data research, sales, marketing, and legal operations. According to traders and analysts, the move has sparked concerns about an approaching AI-fueled disruption of the data and professional services sector, which were previously thought to be big benefactors of the AI era.
🤖 AI Disruption Sparks Tech Selloff
- AI Company: Anthropic
- Tool: Claude AI legal & workflow automation
- Affected Areas: Legal, sales, marketing, data analysis
- Investor Fear: Job losses & margin pressure
- Global Impact: US & Indian tech stocks fall
Wall Street Mirrors the Selloff
Alphabet’s stock fell 1.2 percent ahead of its findings on Wednesday, while the share prices of AI giants Nvidia and Microsoft fell over 3 percent each. Prior to its findings on Thursday, Amazon’s stock fell 1.8%. Adobe and Salesforce both saw declines of about 7%.
The Dow Jones Industrial Average fell 0.34% to 49,240.99 points, while the tech-heavy Nasdaq fell 1.43% to 23,255.19 points.
Expert Views on AI-Driven Market Volatility
Recently, investors have continued to express concern about how AI would affect competition. Yesterday, Anthropic’s introduction of a legal tool for their Claude AI chatbot rekindled the concerns. We are looking at a number of software companies that are thought to be at risk of being disrupted when artificial intelligence advances. Art Hogan, chief market strategist at B. Riley Wealth, was quoted by Reuters as saying, “We are seeing a lot of software businesses across the spectrum get hammered.”
“Yesterday’s IT selloff in the US will also pull the Indian IT index, limiting the Indian market’s rebound. According to VK Vijayakumar, Chief Investment Strategist at Geojit Investments, “there is no underlying underpinning for a protracted recovery because valuations remain high.”
Frequently asked Questions
1. What caused the steep decline in the stocks of Infosys, TCS, and other IT companies?
Fears that artificial intelligence tools will increase competition and upend established software and services companies caused a global tech selloff, which in turn caused Indian IT equities to fall.
2. How did the selloff include Anthropic’s AI tool?
Concerns regarding job losses and margin pressure in IT and professional services companies have been raised by Anthropic’s release of new plug-ins for its Claude AI chatbot, which can automate work in legal, sales, marketing, and data analysis.
3. To what extent did the Nifty IT index decline?
The Nifty IT index was the sectoral indicator that performed the worst throughout the session, falling over 6% in early trading.
4. Which Indian IT stocks were most impacted?
Wipro dropped more than 4%, while stocks including Infosys, Persistent Systems, LTI Mindtree, Coforge, TCS, Tech Mahindra, HCL Technologies, and Mphasis dropped as much as 6%.
5. Will the IT industry soon rebound?
Market experts warn that unless there is greater fundamental support or clarity on AI’s long-term impact, high valuations and persistent AI-related uncertainty may restrict a near-term recovery.
Conclusion
The steep decline in Infosys, TCS, and other IT equities is a reflection of investors’ growing concern about how quickly developing AI technology can change the global software and services sector. Anthropic’s most recent AI advancements have rekindled concerns about disruption, resulting in significant selling of Indian and international tech stocks.
The IT industry may continue to be turbulent in the near future as markets evaluate the actual effects of artificial intelligence on business models and employment, given that valuations are still high and competition is growing.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Readers should consult a qualified financial advisor before making any investment decisions.
