In a stark reminder of tech’s vulnerabilities, India’s Nifty IT index nosedived 5.51% during Thursday’s trading session, hitting a four-month low amid AI disruption fears and U.S. economic resilience. The sector’s total market cap vaporized by ₹1.6 lakh crore, settling at ₹27,32,579 crore.
Heavyweights led the carnage: TCS cratered 5.48% to ₹2,750—its worst in 52 weeks—mirroring Infosys’s decline. Tech Mahindra shed 6.40%, with HCL Tech, Mphasis, and Wipro posting 4.5-5% losses. This rout underscores mounting anxieties over AI’s encroachment on core IT offerings.
The spotlight fell on Anthropic’s ‘Claude Cowork,’ a groundbreaking AI tool touted for independently executing full business workflows. By consolidating multi-phase tasks into one platform, it threatens to erode demand for traditional software stacks that Indian IT firms dominate.
Jefferies’ ‘SaaS-pocalypse’ label captures the peril: AI might render legacy providers obsolete. Pessimistic forecasts suggest up to 40% revenue erosion for affected companies. Meanwhile, America’s labor market strength—1.3 lakh jobs added, unemployment at 4.3%—signals no rush from the Fed to cut rates, hammering export-reliant IT stocks.
Motilal Oswal warns that AI’s self-sufficiency could sideline conventional testing and software services. As global markets digest these shifts, the Indian IT sector stands at a crossroads, compelled to innovate or risk irrelevance in an AI-dominated future.