Infosys, Wipro ADRs slump up to 10% as global tech selloff persists

Shares of Indian technology (IT) companies listed on Wall Street extended their losses, signalling a likely gap-down opening for domestic IT stocks amid rising concerns over AI-driven disruption.

 

The American Depositary Receipts (ADRs) of Infosys Ltd. ended 9.8 per cent lower on Thursday on the New York Stock Exchange, while the Wipro ADR slipped 4.6 per cent. This comes a day after the Nifty IT index hit a more than nine-month low amid concerns over the impact of artificial intelligence (AI) on business models. 

 

On Thursday, index heavyweights Tata Consultancy Services (TCS), Infosys, Tech Mahindra, Coforge, Oracle Financial Services Software, and LTIMindtree declined between 6 per cent and 7 per cent. Among non-index stocks, Sonata Software, KPIT Technologies, Birlasoft, Cigniti Technologies, and Zensar Technologies fell 6-8 per cent. TCS, Wipro, Cyient, and Hexaware Technologies hit their respective 52-week lows.

 

 

Over the past two trading sessions, the Nifty IT index has declined 7 per cent, while losses over the last seven trading days stand at 14 per cent.

 

Weakness in IT shares followed fading expectations of a near-term US Fed rate cut after better-than-expected January jobs data in the US, and investors’ fear that new advanced AI models could automate several traditional IT services, potentially impacting future business growth, analysts said.   ALSO READ | Tech Mahindra, Infy among top analyst picks as IT stocks continue to slide 

Meanwhile, Indian equity markets are likely to open gap-down after global stocks tumbled on Friday. The early indicator for the benchmark Nifty 50 -- GIFT Nifty -- was down 40 points as of 7:45 AM.

 

Growing concerns over AI-led disruption and fading optimism around near-term global rate cuts, following strong US. Jobs data are likely to weigh on sentiment, Ponmudi R, chief executive officer of Enrich Money, said. "Nearly ₹2.80 lakh crore in market capitalisation was erased in the previous session, signalling that traders preferred to lock in gains rather than chase valuations at elevated levels."

 

The technology shift is likely to structurally transform IT services by accelerating delivery timelines and automating volume-driven tasks, thereby challenging the traditional headcount-based outsourcing model, Vinod Nair, Head of Research, Geojit Investments Ltd., said in a recent note.  ===== 

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