artificial intelligence<\/a>.<\/p>\nThe Nifty 50 index has risen 0.4% \u200cso far this month, while the Sensex edged 0.1% lower, underperforming both the MSCI Asia ex-Japan and MSCI Emerging Markets indexes.<\/p>\n
The pressure \u200bon the benchmark indexes has largely come from IT stocks, which carry roughly an 11% weightage in the blue-chip index, the second-highest sectoral weight.<\/p>\n
The 10 Nifty IT constituents have lost a combined $68.6 billion in market capitalisation in February, as of the last close, with the index down 21% and on course for its worst monthly performance in nearly \u200c23 years.<\/p>\n
All 10 index members have \u2060fallen between 16.8% and 27% in February to date. Coforge is the steepest percentage decliner, down 26.8%, while Tata Consultancy Services and Infosys have led the value erosion, losing \u2060about $21.9 billion and $16.3 billion in market value, respectively.<\/p>\n
The selloff reflects growing concerns that rapidly advancing automation tools could compress project timelines and disrupt the labour-intensive delivery model underpinning India’s roughly $300-billion IT services industry.<\/p>\n
Investors have zeroed in on the AI-driven automation \u200bpush \u200bfrom U.S. firms such as Anthropic and Palantir, heightening concerns \u200bover faster project execution, pricing pressure and \u200creduced billable hours.<\/p>\n
Brokerages warn the Indian IT sector could face further pressure if AI starts to eat into application services revenue, which typically accounts for 40% to 70% of total revenue for these companies.<\/p>\n
“There are no easy answers to whether AI eventually renders IT services obsolete over the long term,” said analysts led by Abhishek Pathak of Motilal Oswal.<\/p>\n
“The narrative that AI is coming for not just IT but large swathes of the economy \u200ccould be too strong to shake, at least in the \u200bshort term,” Motilal Oswal analysts said.<\/p>\n
A slowdown or contraction in India’s \u200bIT sector, whether through layoffs or reduced hiring, \u200bcan have immediate consequences on both residential and commercial real estate demand. The Nifty \u200cRealty index has risen roughly 2% in February, \u200bfollowing a nearly 18% decline \u200bover the past three months.<\/p>\n
Concerns over Indian IT companies have also accelerated foreign selling in the sector in 2026 so far.<\/p>\n
While FPIs have turned buyers of Indian stocks in February on an overall basis, \u200bwith inflows of 196.75 billion rupees, \u200cthey pulled out about 110 billion rupees ($1.21 billion) from IT stocks in the first half \u200bof February, following a record 750 billion rupees of net selling in 2025.<\/p>\n","protected":false},"excerpt":{"rendered":"By Bharath Rajeswaran Feb 25 (Reuters) – Indian shares have lagged their Asian and emerging market peers so…\n","protected":false},"author":2,"featured_media":300994,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[365,363,364,165245,165243,165244,111,139,69,1730,145],"class_list":{"0":"post-300993","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-artificialintelligence","11":"tag-emerging-market","12":"tag-indian-rupees","13":"tag-indian-shares","14":"tag-new-zealand","15":"tag-newzealand","16":"tag-nz","17":"tag-tata-consultancy-services","18":"tag-technology"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/300993","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=300993"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/300993\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/300994"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=300993"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=300993"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=300993"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}