IT index down 9% in 4 days; at 3-mth low; what's making the Street nervous?

Cyient, Birlasoft, Cigniti Technologies, eClerx Services and Tata Technologies were down between 4 per cent and 6 per cent in Friday's intra-day trade.

Information technology (IT) shares price movement today?

 

Shares of information technology (IT) companies continued to reel under pressure, falling by 2.6 per cent at 35,211.95, hitting three-month low, on the National Stock Exchange (NSE) in Friday’s intra-day trade.

 

In the past four trading days, the Nifty IT index has plunged 9 per cent. The index is trading at its lowest level since November 7, 2025.

 

At 11:20 AM; Nifty IT index was down 2 per cent, as compared to 0.23 per cent decline in the Nifty 50.

 

Persistent Systems, Coforge and Oracle Financial Services were down 4 per cent each, while, Tata Consultancy Services (TCS), Tech Mahindra, HCL Technologies, Infosys, Wipro and LTIMindtree from the IT index were down in the range of 2 per cent to 3 per cent.

 

 

Hexaware Technologies hit all-time low of ₹572.50, plunging 11 per cent on the NSE in intra-day trade. In the past two trading days, the stock tanked 17 per cent and it plunged 36 per cent from its 52-week high level of ₹900 touched on July 9, 2025.

 

Cyient, Birlasoft, Cigniti Technologies, eClerx Services and Tata Technologies among non-index stocks were down between 4 per cent and 6 per cent.

 

Why IT stocks underperforming the market?

 

Indian IT services stocks followed the global rout in technology/software/consulting and outsourcing stocks since February 4, 2026. The key catalyst was the Palantir earnings call, which highlighted how the company is upending pay per seat software (workday, ServiceNow, etc.) as well as third-party software with its own AI offerings.

 

The company also shared a few examples of clients getting rid of third-party software. In addition, Palantir also mentioned that its AI platform was powering complex SAP migration work, compressing implementation timeline from years to weeks. In addition, Anthropic's entry into automating low-level legal services work and Gartner's muted guidance also had a bearing on sentiment, Motilal Oswal Financial Services (MOFSL) said.

 

While AI's threat to software coding hours was well known, Palantir's comments put ERP implementation into the spotlight, which so far could be considered less impacted from AI's productivity gains, the brokerage firm said, and, believe stock reaction again resets the negative sentiment for the sector.

 

In the next 3-6 months, MOFSL said they will continue to monitor AI-native partnerships, which will be a key driver in the next 12-14 months. The brokerage firm expects that this should lead to a pick-up in AI services deals in mid-2026 in the form of short-cycle deals.

 

According to ICICI Securities, Indian IT stocks were hit hard, amid concerns that AI-native platforms may move up the value chain and automate outsourced work. Global SaaS names such as Salesforce and other enterprise software firms also saw heavy selling as markets priced in faster AI-led disruption to legacy models.

 

The market reaction appears knee-jerk and sentiment-driven rather than fundamental. While AI workspaces like Claude Cowork signal a shift toward agent-led automation, enterprises still require large-scale integration, governance, data modernization and system orchestration which are areas where IT services firms remain critical, the brokerage firm said.

 

Industry leaders argue the shift is evolutionary, with AI changing how work is delivered rather than eliminating the need for partners. Moreover, historically, service providers have evolved alongside ERP, cloud and digital waves, and are now repositioning as AI builders and transformation partners. Near-term volatility may persist, but structurally, AI adoption could expand the services opportunity rather than shrink it, shifting revenue models toward outcome-based and AI-enabled engagements, ICICI Securities said.  ======================================  Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.