New Delhi: After a strong rally on Monday and Tuesday, Indian stock markets saw a sharp downturn on Wednesday, driven largely by heavy losses in IT stocks. Analysts are calling it the worst day in the history of Indian IT stocks, with investors facing an estimated ₹1.9 lakh crore loss.
The sell-off was not limited to India; global tech markets also felt the impact. In the US, the Nasdaq fell 1.4%, erasing about $300 billion in market capitalization of software companies.
Domestic Market Impact
- Infosys and Mphasis dropped around 7%.
- LTI Mindtree, Coforge, TCS, Mphasis, and HCL Tech fell between 5–6%.
- Wipro and Tech Mahindra declined by roughly 4%.
The fall in IT stocks dragged down the Nifty IT Index, reducing the combined market capitalization of IT companies from over ₹30 lakh crore to below that mark.
Reasons Behind the Crash
Investors are concerned that the rise of Artificial Intelligence (AI) could disrupt traditional software and IT services companies. The latest trigger came on Friday when AI developer Anthropic launched a new tool for automated legal work, capable of performing tasks across legal, sales, marketing, and data analysis. This heightened fears of automation impacting IT service demand, prompting large-scale profit-booking and sell-offs.
Broader Market Movement
At 11:25 AM, the BSE Sensex traded at 83,573.49, down 165.64 points (0.20%), following two consecutive days of strong gains fueled by the India-US trade deal, which had previously pushed the Sensex up by over 2,000 points on Tuesday.
Despite the positive trade agreement with the US, investors’ caution on AI disruption overshadowed optimism, resulting in a historic decline for the IT sector.
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