Selling pressure in global technology stocks spread to US-listed Indian IT stocks on Thursday, with Infosys and Wipro ADRs falling sharply amid concerns over broader risk-off mood and interest rate outlook and AI-driven disruption.Infosys’ American Depositary Receipts (ADRs) fell more than 7 per cent to a low of $14.59 in early trade, while Wipro’s ADRs fell 5.4 per cent to $2.26. The fall follows weakness in domestic IT stocks and a decline in major US technology companies, ET reported.The broader US market was also under pressure, with the Nasdaq Composite slipping more than 300 points, or 1 percent. At around 11:11am ET (9:43pm IST), the Nasdaq was at 22,764.90. The S&P 500 fell 0.6 percent to 6,902.80, while the Dow Jones Industrial Average dropped 249.27 points, or 0.50 percent, to 49,872.10.Among individual stocks, Cisco fell as much as 11 per cent, while large-cap technology companies like Apple, Nvidia and IBM fell as much as 6 per cent during the session.Back home, Indian benchmark indices had closed sharply lower earlier in the day due to heavy selling in IT stocks. The Nifty IT index closed 5.5 per cent lower, with all 10 of its components in negative territory.The selloff resulted in a loss of about Rs 1.3 lakh crore in the market capitalization of listed IT companies. Stronger-than-expected US jobs data along with persistent concerns over disruption caused by AI in outsourcing business models dampened expectations of a US Federal Reserve rate cut in the near term, leading to a sharp decline.The Nifty IT index has now emerged as the worst performing sectoral index, falling nearly 21 per cent in the last 12 months.Vinod Nair, head of research at Geojit Investments, said the latest fall in Indian IT stocks was largely driven by stronger-than-expected US employment data and a modest decline in the unemployment rate, dampening expectations of an early rate cut by the US Federal Reserve. Concerns over AI-led disruption are weighing on sentiment across the sector, he said.On AI risks, Nair told ET that the technology is structurally changing Indian IT services by shortening delivery timelines and automating volume-driven work, putting pressure on traditional headcount-based outsourcing models.“There is likely to be layoffs in routine heavy areas as fewer people will be required to deliver the same results. Even ERP implementations, as highlighted by Palantir’s recent focus, are now vulnerable to AI disruption. Clients are moving toward outcome-based pricing. In the coming quarters, AI adoption may create barriers to deal wins, potentially impacting the topline, making it difficult to assess its true impact. “Close monitoring of deal flow will become necessary,” he warned.
