IT stocks faced selling pressure, particularly the Nifty IT index, which dropped by 2.59% to 28,288 due to worries about generative artificial intelligence affecting traditional revenue streams. This decline led to all index constituents falling by around 7%. The broader market also experienced volatility, with the PSU Bank and FMCG indices falling by up to 1%.
At midday, all Nifty IT constituents continued to see losses, with major names like Persistent Systems, Wipro, and Coforge witnessing significant declines on the NSE. Persistent Systems fell by about 3% to Rs 4,496.70, Wipro by 3.5% to Rs 188.25, and Coforge by 6.7% to Rs 1,008.10.
Furthermore, other prominent IT stocks such as Oracle Financial Services Software (OFSS), Infosys, and TCS also traded lower, with declines ranging from 2% to 2.79%. HCLTech dropped by 2.32%, while LTIMindtree and Mphasis fell by 2.35% and 2.43%, respectively. Tech Mahindra showed more resilience but still saw a 1.59% decline to Rs 1,318.20.
The IT sector is experiencing profit booking as concerns grow over generative AI potentially disrupting core service lines like application development and maintenance, significant revenue sources for IT firms. Nvidia’s CEO, Jensen Huang, recently highlighted the arrival of “physical AI,” predicting that every industrial company will transition into a robotics firm, indicating a shift in technology trends. Notably, Huang projected that demand for Nvidia’s next-gen AI platforms could generate $1 trillion in revenue by 2027.
