The technology stocks continue to be under pressure. The Nifty IT Index is down 2.5%. TCS and Wipro have hit fresh 52-week lows in early trade. The top 5 large cap losers are the IT stocks.
The Infosys and Wipro ADRs had also plunged over 4% in overnight trade. The Indian IT stocks have seen significant losses. Top counters like Infosys, TCS are down 10% so far this year. The cut for Wipro is even deeper, down over 15% so far this year. The Nifty IT Index is down 10% in 2026 so far.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments pointed out that, “Tech stocks, reeling under the Anthropic shock, are unlikely to recover soon. The sharp dip in the ADRs of top Indian IT companies in US yesterday, indicates that Indian IT will continue to struggle. Even with occasional profit booking, the undertone of the market will remain resilient mainly because there is a trend of FIIs turning buyers.”
3 reasons why tech stocks are under pressure
Here is a detailed analysis of the three reasons why the pressure on tech stocks continues-
1. Disruption worries in IT Sector
One of the biggest concerns for the IT sector is the disruption that AI is set to bring forth for the IT sector. US Financial services stocks JPMorgan, Bank of America, and Charles Schwab fell by more than 2% amid concerns about AI-driven disruption in wealth management. Software companies Salesforce and Intuit also declined more than 4% as AI-powered tools threaten traditional business models.
The market is worried about how new technology provides opportunities by unlocking incremental addressable spend. According to Kotal Institutional Equities, the application of AI to legacy technologies in the enterprise tech stack requires contextual awareness to integrate legacy deterministic software with the probabilistic nature of recent technology, which involves significant heavy lifting.”
According to Kotak in a report on the outlook for Cognizant, “New addressable spends, which were not possible with traditional software, provide another avenue for growth in the medium term. Enterprise package software, including systems of record, has been there for a long time and now AI layers would need to be applied on top of it to extract desired outcomes.”
2. Concerns about economic weakness and rate cuts in US
The concerns about the state of the economy in the US continue. Most economists are still building the case for it. The US Bureau of Labour Statistics, in its shutdown-delayed report, said 130,000 jobs were added to nonfarm payrolls in January, well above forecasts for a rise of 70,000, while both November and December were revised down a touch. The unemployment rate ticked lower to 4.3% from 4.4% in December, below forecasts for a reading of 4.4%.
However, all eyes are now on the inflation data due on Friday and the expectation is that the Fed may still cut rates going forward.
3. Dollar firm
The US dollar firmed up after stronger-than-expected January jobs data. The stronger jobs also dented expectations for near-term interest rate cuts, while investors awaited inflation data due on Friday for more monetary policy cues. The Dollar Index is hovering close to the 97 mark.