Indian IT Shares Poised for Steepest Weekly Slide in Four Months as Investor Anxiety Over AI Deepens

Indian information technology stocks declined sharply on Friday, pushing them toward their largest weekly fall in more than four months as concerns about the impact of artificial intelligence on traditional revenue streams intensified among investors. The Nifty IT index slipped about 2 percent on the day, extending its weekly loss to around 7 percent, and wiped out roughly 2 trillion rupees in market value for sector companies.

Pressure on IT stocks came from fears that rapid advances in AI automation could undermine the labour-intensive service delivery model that underpins much of the industry’s revenue. Fresh AI tools introduced by international firms such as Anthropic and Palantir have heightened worries that shorter project timelines and reduced dependence on human resources may erode earnings from high-margin application services.

All major constituents of the sub-index finished lower, with mid-tier firm Coforge among the hardest hit. Heavyweights including Tata Consultancy Services and Infosys also saw near 2 percent declines. The sell-off comes after the index has dropped sharply since early 2025, including its most significant downturn in six years earlier in the week.

Market participants noted that technology stocks globally have been under pressure as investors reassess valuations in the face of shifting demand and uncertainty over the pace at which AI could disrupt traditional outsourcing models.

Indexes outside the IT sector also experienced volatility on Friday, reflecting broader risk aversion among participants as macroeconomic and technological uncertainties converge on equities markets.