Shares of Indian software exporters slid more than 4% on Thursday, extending losses for the week, as persistent fears of AI-led disruption and fading hopes of a near-term rate cut by the U.S. Federal Reserve weighed on sentiment.
The Nifty IT index fell to a four-month low, with Tata Consultancy Services, Infosys and HCLTech down 3.7% to 4.4%. The 10-member sub-index was the worst performer on the day and for the year after falling 12.6% in 2025, and is down 11.4% so far in 2026.
Tech stocks around the world have come under pressure after Amazon and Google-backed Anthropic launched its Claude Cowork AI tool to automate tasks across legal, sales, marketing and data analysis, stoking concerns over demand for people-intensive IT services.
Indian IT firms, whose labour-intensive model relies on deploying large workforces for client projects, were hit as well.
On Thursday, hopes of a rate cut in the U.S. faded after job growth unexpectedly accelerated in January and unemployment rate fell, leaving the Federal Reserve room to keep interest rates unchanged for some time. That weighed on the IT firms’ shares, which count the world’s largest economy as one of their biggest markets.
Rate cuts are seen as a key lever for lifting demand for IT spending that has largely been muted.
Anthropic also launched an upgraded version of its Claude artificial intelligence model that can work on tasks for longer and more reliably, while showing gains related to coding and finance. That compounded fears that software companies are increasingly vulnerable to disruption as tools such as Claude automate routine tasks.
Indian IT stocks alone have shed 13% since February 4, when the selloff began, resulting in TCS, previously India’s fourth-most valuable stock, sliding to the no. 6 spot.
The slump in IT stocks also dragged the country’s benchmarks lower, with the Nifty 50 down 0.4% and BSE Sensex down 0.44%.