Nifty IT index tanks 9% in 4 days; Wipro, TCS down up to 6%; here's why

Thus far in the calendar year 2026, the market price of TCS tanked 33 per cent, as compared to 11.5 per cent fall in the Nifty 50.

Nifty IT index movement

 

Shares of information technology (IT) companies extended losses, with the Nifty IT index falling another 2 per cent on the National Stock Exchange (NSE) in Monday’s intra-day trade after US-based Nasdaq 100 sank 5 per cent on Friday.

 

In the past four trading days, the IT index has tanked 9 per cent primarily driven by rising concerns around the potential impact of Generative AI (Gen AI) on the long-term business model of IT services companies, along with macro and geopolitical uncertainties. The index hit a 52-week low of 27,078 on May 14, 2026.

 

At 09:39 AM; the Nifty IT index was down 1.8 per cent, as compared to 1 per cent decline in the Nifty 50.

 

 

Among individual stocks, Tata Consultancy Services (TCS) hit a multi-year low of ₹2,144.10, down 2.5 per cent on the NSE in intra-day trade. The stock price of Tata Group Company was quoting at its lowest level since August 2020. Thus far in the calendar year 2026, the market price of IT major tanked 33 per cent, as compared to 11.5 per cent fall in the Nifty 50.

 

Share price of Wipro slipped 6 per cent to ₹187.80 in intra-day deals. In the past one week, the stock has plunged 9 per cent. It now trades close to its 52-week low of ₹186.50 touched n March 30, 2026.  CHECK Stock Market LIVE Updates 

Why are IT stocks under pressure?

 

The US markets ended lower on Friday, with stocks hit by a tech selloff and higher bond yields after a solid jobs report added to bets that the Federal Reserve's next interest-rate move will be a hike. The Nasdaq 100 sank 5 per cent, the most since April 2025. The S&P 500 down 2.6 per cent.

 

Meanwhile, reports said brokerages cut the target price of the software services company Accenture. Truist downgraded the stock to 'Hold' and slashed the target price. Similarly, Citi cut the company's target price while maintaining a neutral rating, reports stated.

 

Indian large-cap and midcap IT stocks have corrected meaningfully despite relatively stable operating performance and continued deal wins, as investors reassess near-term growth visibility and the potential structural implications of AI on traditional services delivery models.

 

Radical transformation in technology led by AI is shifting the dynamics of discretionary spending and mounting pressure on traditional IT services. The management of Infosys in its FY26 annual report said that they expect client spending and investments to continue to move towards AI in the near term. These investments are expected to be crucial during this period of economic uncertainty.

 

The management further said they continued to witness businesses attempting to reimagine their cost structures, increase business resilience and agility, personalize experiences for customers and employees, and launch new and disruptive products and services, aided by enterprise AI. With Infosys early lead in AI, the management believes the company is well-positioned to take advantage of these market opportunities.  Check - TOP GAINERS NSE | TOP LOSERS NSE 

ICICI Securities view on IT sector post Q4 results

 

Q4FY26 for Indian IT sector has reinforced the divergence between Tier1 and select Tier-2 players, with execution-led growth stories continuing to outperform despite an uncertain macro backdrop. While demand commentary remained broadly stable and deal momentum stayed healthy across the sector, FY27 guidance from several large-cap companies came in softer than expectations, reflecting delayed discretionary spending, slower conversion cycles and continued caution across clients, particularly in the US market, ICICI Securities said in a special report.

 

At the aggregate level, Tier-1 IT companies largely delivered muted low single digit growth (-3.3 per cent to 1.2 per cent QoQ CC and -0.6 to 4.1 per cent YoY CC) with management commentary indicating that near-term demand visibility remains uneven despite healthy pipelines. In contrast, select Tier-2 companies continued to demonstrate relatively stronger execution, growth confidence and better growth visibility vs Tier-1 peers with high single digit to double digit growth for select few in Tier 2 space. 

 

While valuations across IT services have turned relatively more supportive following the prolonged correction phase, near-term growth visibility remains uneven across players. The brokerage therefore remains selectively positive on the sector, favouring companies with superior execution, stronger large-deal momentum, AI monetisation capabilities and resilient margin profiles such as Persistent Systems and Coforge, while expecting Tier-1 growth to remain relatively moderate until discretionary spending & macro conditions improve meaningfully.  ==========================================  Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.