AI Anxiety Deepens Market Strain: Nifty IT’s 21% Slide Signals Rare Sectoral Shock

Volatility continued to grip India’s technology counters as concerns over artificial intelligence-led disruption weighed heavily on investor sentiment. Indian equities remained under pressure from sustained turbulence in the IT sector, with frontline stocks struggling to stabilise amid persistent uncertainty over future business models and revenue visibility.

The Nifty IT index has declined by roughly 21%, marking one of its weakest monthly performances in more than two decades. The slide has been led by sharp losses in sector heavyweights such as Tata Consultancy Services and Infosys, whose declines have contributed significantly to the broader market’s muted returns.

The downturn reflects mounting apprehension that rapid advancements in artificial intelligence could alter traditional outsourcing structures and pricing models that have long underpinned India’s IT services industry. While companies have sought to position themselves as AI enablers, investors remain cautious about the pace and scale of transition.

Adding to the pressure, foreign institutional investors have stepped up selling in IT stocks, signalling reduced overseas conviction in the near-term outlook for the sector. The combination of sector-specific concerns and sustained foreign outflows has amplified volatility, leaving technology shares at the centre of the current market churn.