Shares of Indian software exporters fell more than 4% on Thursday, extending losses for the week, as persistent fears of AI-led disruption and reduced expectations of a near-term rate cut by the US Federal Reserve weighed on sentiment.
The Nifty IT index fell to a four-month low, with Tata Consultancy Services, Infosys and HCLTech falling 3.7% to 4.4%. The 10-member sub-index was the worst performer for the day and year after falling 12.6% in 2025, and is down 11.4% so far in 2026.
Tech stocks around the world have come under pressure after Amazon and Google-backed Anthropic launched a cloud cowork AI tool to automate tasks in legal, sales, marketing and data analysis, raising concerns over people’s demand for intensive IT services.
Indian IT companies, whose labor-intensive model depends on deploying large workforces for client projects, were also affected.
Hopes for a rate cut in the US faded on Thursday after job growth unexpectedly accelerated in January and the unemployment rate fell, leaving the Federal Reserve with room to keep interest rates unchanged for some time. This had an impact on the shares of IT companies, which consider the world’s largest economy as one of their biggest markets.
Rate cuts are seen as an important lever to boost demand for IT spending which is largely down.
Anthropic also launched an improved version of its cloud artificial intelligence model that can work on tasks for longer periods of time and more reliably, showing benefits related to coding and finance. This has raised fears that software companies are becoming more vulnerable to disruption as tools like the cloud automate routine tasks.
Indian IT stocks alone have fallen 13% since February 4, when the sell-off began, resulting in TCS, previously India’s fourth most valuable stock, slipping to no. 6 place.
The fall in IT stocks also dragged down the country’s benchmarks, with the Nifty 50 falling 0.4% and the BSE Sensex falling 0.44%.
