Indian IT sector's Nifty share at record-low: What's the reason?

Indian IT sector's Nifty share at record-low: What's the reason?

India's information technology (IT) sector is witnessing a major decline in its dominance on the country's stock market.

The combined weight of five top IT companies in the Nifty 50 index has fallen below 7.6%, the lowest since at least 2002, Bloomberg reported.

This decline is largely due to fears of artificial intelligence (AI)-led disruption and a prolonged selloff in the sector.

Shift in India's stock market dynamics

The decline in the IT sector's weightage marks a major shift in leadership within India's $5 trillion stock market.

It has reduced the sector's influence on benchmark returns.

The Nifty IT Index has plummeted by 29% this year, compared to a mere 9% drop in the broader gage.

Investors are concerned that generative AI could disrupt the traditional outsourcing model that fueled the industry's growth in the early 2000s.