Shares of major Indian IT firms slid on Monday, with Wipro and TCS leading a 2% drop in the Nifty IT index after a sharp selloff in US technology, semiconductors and AI-related stocks knocked sentiment on global markets.
The domestic rout mirrored weakness on Wall Street where AI-driven names and chipmakers faced renewed profit-taking following a Nasdaq downturn. Investors rotated away from high-growth tech exposure, putting pressure on exporters whose valuations are tied to global demand and investor appetite for tech risk.
India's IT sector has been particularly sensitive to swings in US markets over the past several years as advisors and companies alike priced in continued demand for cloud, software and AI services. Recent months of strong performance left some names vulnerable to volatility when sentiment shifted internationally.
For Indian markets, the selloff highlights ongoing dependence on overseas tech narratives: losses in the US can quickly translate into lower valuations here, affect hiring plans and slow deal momentum if client budgets tighten. Market participants will watch upcoming US earnings and guidance closely for signs of stabilization.
What triggered the slide
Traders point to profit-booking in AI and semiconductor stocks on the Nasdaq, which cascaded into broader tech indices and into IT-heavy emerging market benchmarks. The move underscores how concentrated flows into AI themes can amplify downside when expectations reset.
Outlook for investors
Short-term volatility may persist as investors reassess growth premiums and recalibrate exposure to tech-linked names. Longer-term fundamentals for Indian IT—contract pipelines, offshore demand and currency movement—remain key determinants of resilience.
