Why Indian IT Stocks Crashed Today: Global AI Shock Triggers Sell-Off in Infosys, TCS and Wipro

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Why Indian IT Stocks Crashed Today: Global AI Shock Triggers Sell-Off in Infosys, TCS and Wipro

Indian IT stocks witnessed a sharp sell-off after global markets reacted to new enterprise AI tools launched by Anthropic. Weakness in US tech stocks spilled over to Dalal Street, triggering heavy losses in Infosys, TCS, Wipro, HCLTech and Tech Mahindra as investors worried about AI disrupting traditional outsourcing models.

Published by Somesh | February 04, 2026

Indian IT stocks opened sharply lower after a global tech sell-off sent shockwaves through Dalal Street. By early trade, shares of Infosys, TCS, Wipro, HCLTech and Tech Mahindra had fallen as much as 6%, reflecting deep investor anxiety over the future of traditional IT services in an increasingly AI-driven world.

The trigger came from the US overnight, where the Nasdaq declined sharply following the launch of advanced enterprise AI tools by Anthropic. These tools are designed to automate tasks typically outsourced to IT service providers, including document processing, compliance work and operational analysis. The announcement rattled global investors, who quickly cut exposure to IT services stocks.

The impact was immediate on Indian IT ADRs listed in the US, and by the time domestic markets opened, selling pressure had already intensified. Analysts noted that the sector was vulnerable due to stretched valuations, slow deal ramp-ups and cautious discretionary spending by global clients.

While fears of AI replacing outsourcing may be overstated in the short term, markets tend to react ahead of fundamentals. Investors are now focused on how quickly Indian IT companies can pivot towards AI-led services, cloud integration and automation to protect long-term revenue growth.

Despite the volatility, India’s IT sector remains globally competitive, with strong client relationships, scale and technical expertise. However, continued global AI developments mean sentiment is likely to remain fragile, keeping IT stocks sensitive to international tech news and innovation-driven shifts.