It was a Black Thursday for IT companies. In less than 10 days, the IT gauge fell more than 5.5% for the second time amid rising concerns that artificial intelligence could disrupt their business models. Additionally, strong US jobs data reduced expectations of imminent Federal Reserve rate cuts, further dampening the investor sentiment.

The rout in software shares dragged the benchmarks lower, with the Sensex falling 558.72 points, or 0.66%, to close at 83,674.92, while the Nifty Niftydeclined 146.65 points, or 0.57%, to 25,807.20, snapping the four-day gaining streak.

“Thursday’s decline in Indian IT stocks followed the downturn in US tech shares and reflected continuing fears of widespread AI-led disruptions in SaaS and IT services,” said Pareekh Jain, founder and chief executive, EIIRTrend.

Rate Cut Mirage

Also, US job data came strong on Wednesday, creating the possibility that US rate cuts might not happen in the near term. Indian IT firms were heavily expecting rate cuts which could revive demand and tech spending. All these factors spooked investors, Jain said.

Infosys, TCS, and HCL Tech together contributed 460 points, or 82%, to the Sensex’s 559-point fall, and 119 points to the Nifty’s 146-point decline.

The Nifty IT index was the top sectoral laggard on Thursday, plunging 5.51%, or 1,934.95 points, to a 10-month low of 33,160.20. All Nifty IT constituents ended in the red, each falling more than 4.5%. Infosys, TCS, and HCL Tech declined 5.97%, 5.77%, and 5.2%, respectively.

Anthropic Shock

On February 4, the IT gauge had slumped 2,266.10 points, or 5.87%, after Anthropic launched its latest AI tools, triggering a brutal selloff that wiped out roughly $285 billion from global IT, legal tech and financial services shares.

So far in February, the Nifty IT index has fallen 12.82%, significantly underperforming the Nifty, which gained 1.92%. The IT index is now down 16% from its recent high of 39,488 recorded on December 22, 2025.

As a result of heavy selling in software shares, the 10 Nifty IT constituents have collectively lost ₹4.70 lakh crore in market capitalisation over the past six trading sessions, including ₹1.64 lakh crore on Thursday alone.

Besides IT, realty, oil and gas, and FMCG were among the top sectoral laggards. Stocks from the banking, financial services, and consumer durables sectors helped limit the overall downside.

The market breadth remained negative, with 2,530 losers against 1,676 gainers on the BSE. Investor wealth eroded by ₹2.5 lakh crore to ₹472.48 lakh crore.

Foreign portfolio investors bought shares worth Rs 108.42 crore while domestic institutional investors purchased equities worth Rs 276.85 crore, as per provisional data by the BSE.