Why Infosys, TCS, Wipro and Other IT Stocks Crashed as Global Tech Sell-Off Spooked Markets

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Why Infosys, TCS, Wipro and Other IT Stocks Crashed as Global Tech Sell-Off Spooked Markets

Indian IT stocks plunged sharply after a global tech sell-off in the US rattled investor confidence. Fears over AI disrupting outsourcing, weak global tech sentiment, and stretched valuations triggered heavy selling across Infosys, TCS, HCLTech, Tech Mahindra and Wipro.

Published by Somesh | February 04, 2026

Indian IT stocks witnessed a sharp sell-off on Thursday, with frontline names such as Infosys, TCS, HCLTech, Tech Mahindra and Wipro falling in unison. By early afternoon, Infosys had plunged over 8%, TCS dropped 7%, while HCLTech and Tech Mahindra slid up to 6%. Wipro was also down nearly 5%.

The trigger for the sudden meltdown came from overseas. US markets saw a sharp correction overnight as technology and software stocks weakened on rising concerns about artificial intelligence disrupting the traditional outsourcing model. Sentiment worsened after AI firm Anthropic unveiled advanced tools capable of handling document review, compliance checks and data analysis—tasks typically outsourced to Indian IT firms.

Shares of Infosys and Wipro listed in the US as American Depositary Receipts (ADRs) fell sharply overnight, signalling trouble ahead for domestic markets. When Indian markets opened, the negative cues from ADR trading quickly translated into heavy selling pressure.

The sector was already under stress due to elevated valuations, slow deal ramp-ups and cautious global client spending, particularly in the US and Europe. Fears that AI could automate low-end outsourced work further dented investor confidence. A stronger rupee also added pressure by squeezing margins for dollar-billing IT companies.

Market experts say the sell-off is largely sentiment-driven but highlights how fragile confidence had become in the traditional IT services model. Mid-tier IT stocks fell even more sharply as traders cut risk, pushing the Nifty IT index among the day’s worst performers.

While Indian IT companies continue to invest in cloud, automation and AI-led services, the sector is expected to remain volatile in the near term as investors look for clarity on global tech spending trends and the pace of AI adoption.