Indian IT stocks slumped up to 6% as a global tech sell-off weighed on investor sentiment, dragging the Sensex down over 450 points and pushing Nifty below 25,700. The recently updated AI chatbot by Anthropic is being seen as the main reason behind the tech sell-off.
Stocks of Indian IT giants such as Tata Consultancy Services, Infosys, and Wipro experienced a rapid fall in the early morning trade on Wednesday (February 4, 2026). It is followed by an overnight decline in tech stocks on Wall Street amid concerns that artificial intelligence could intensify competition.
Infosys share price crashed 6% to its lowest level in nearly three months on the NSE. TCS shares, too, lost 6% in intraday deals today. Wipro stock was down 6.7% and HCL Tech 6.44%. All IT index constituents remained in the red, dragging the Nifty IT index lower by 5.99%.
At 9:21 am, the Sensex traded at 83,645.60, down 93.53 points, while the Nifty hovered at 25,718.50, slipping 9.05 points. Market sentiment remains cautious after Wednesday’s sharp rebound, and analysts believe the upside may now be harder to sustain.
The sell-off was visible across the globe as tech stocks from the US, Europe, and Asia tumbled. Most large-cap US technology stocks ended Tuesday's (February 3, 2026) session lower. Gartner ended the day with cuts of 21%, while others like Nvidia, Meta, and Microsoft lost over 2% each, and Oracle shed 3.4%.
In Asian trading, cloud-based accounting software maker Xero slid as much as 15% in Sydney trading, the most since March 2020. Hong Kong-listed Kingsoft Cloud Holdings Ltd. and Japan’s Nomura Research Institute Ltd. each dropped at least 6%, a Bloomberg report stated.
The US markets recently witnessed a massive sell-off. It was driven by growing fears of a recession amid a rising trade tariff war. Tech heavyweight Nasdaq Composite index is falling continuously, and it has dropped nearly 14 percent from its peak. On Monday (February 2, 2026), the Nasdaq index crashed 4 percent and extended the losing run to Tuesday as it closed in the red with a cut of 0.18 percent.
According to a Reuters report, AI company Anthropic has released new plug-ins for its Claude Cowork agent that can automatically handle tasks in areas like law, sales, marketing, and data analysis. This development raised concerns about AI displacement, which further triggered a sell-off in IT stocks.
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Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, warned, “The rally fuelled by the US–India trade deal will face hurdles to sustain. The IT sell-off in the US yesterday will drag the Indian IT index too, constraining the rally in the Indian market. Since valuations continue to be high, there is no fundamental support for a sustained rally.”
He added, “A trigger from monetary policy scheduled on 6th Feb is unlikely since the MPC is expected to retain the rates and stance with a dovish tone. The economy is now in a state where a monetary stimulus is not required.”
The United States is the biggest market for Indian IT companies. The US market accounts for a significant share of their revenue. Any slowdown in the US economy directly affects the performance of Indian IT companies.