The Nifty IT index slumped over 4% in early trade on February 12, as renewed concerns over artificial intelligence disrupting traditional software and IT services businesses rattled investor sentiment. Fears around automation, rapid AI adoption, and potential margin pressure continued to weigh heavily on the sector.
Among individual stocks, Coforge and Infosys plunged nearly 5% each, with Infosys sliding to its lowest level since April 17, 2025. Other frontline IT names such as TCS, Tech Mahindra, Mphasis, LTI Mindtree, and Persistent Systems declined over 4% each, while HCL Technologies and Wipro shed more than 3%.
The sell-off also reflects broader pressure on Indian and global IT stocks following the release of the US January jobs report, which showed stronger-than-expected payroll growth and a decline in the unemployment rate to 4.3%. While the data signals labour market resilience, it may give the US Federal Reserve room to keep interest rates elevated, raising concerns over tighter financial conditions and subdued tech spending.
However, economists pointed out that job creation remained largely concentrated in healthcare and social services, with limited gains across other sectors. Christopher Rupkey, Chief Economist at FWDBONDS, told Reuters, “The only jobs being filled in January are in health care and social assistance, along with some non-residential specialty trade contractors probably related to AI facilities, none of which guarantee the economy’s future success.”
Meanwhile, renewed fears of AI-led disruption further dented sentiment. Last week, IT stocks came under pressure after Anthropic launched advanced legal AI tools for its Claude chatbot, capable of automating tasks across legal, sales, marketing, and data analytics functions. These developments have intensified concerns that AI could disrupt professional services and data-driven businesses, traditionally seen as major beneficiaries of the AI boom.