Indian Tech Stocks Plunge as Anthropic’s AI Tools Spark Global Disruption Fears
Shares of Indian IT stocks came under heavy pressure on February 4, 2026, as investor concerns deepened over the growing impact of advanced artificial intelligence on staffing-heavy service models. The NIFTY IT index, which tracks major technology companies listed on the National Stock Exchange, plunged 6.3 per cent - its sharpest single-day fall in over three years - reflecting mounting anxiety across the Indian IT sector.
The sell-off followed the launch of new AI plug-ins by U.S.-based startup Anthropic for its Claude Cowork agent. These tools are designed to automate tasks across legal services, sales, marketing and data analysis. The announcement unsettled global markets by underscoring how AI automation could replace functions traditionally managed by large IT teams - a key revenue driver for India’s export-focused software services industry.
Analysts say the abrupt drop reflects mounting investor anxiety about how rapidly AI could erode demand for conventional services outsourcing. “These AI plug-ins are mainstreaming automation that was previously seen as niche,” one strategist told Reuters. “If companies can use tools like Claude to perform tasks that were billed hourly by human consultants, the business model for staffing-intensive IT firms faces real pressure.”
Major Indian IT exporters ended the session firmly in the red. Infosys, one of the country’s largest IT services companies, saw its shares fall sharply, while Tata Consultancy Services (TCS), Wipro and HCLTech also recorded notable losses. Smaller players were not spared either, with Persistent Systems witnessing a steep decline, adding to the broad weakness across tech stocks.
The negative sentiment was not confined to Indian markets. In the U.S. and Europe, data analytics and professional services firms also saw their shares slide after the announcement, as investors reassessed the earnings outlook for sectors vulnerable to AI-driven substitution. This Shares of Indian IT stocks came under heavy pressure on February 4, 2026, as investor concerns deepened over the growing impact of advanced artificial intelligence on staffing-heavy service models. The NIFTY IT index, which tracks major technology companies listed on the National Stock Exchange, plunged 6.3 per cent - its sharpest single-day fall in over three years - reflecting mounting anxiety across the Indian IT sector.
The sell-off followed the launch of new AI plug-ins by U.S.-based startup Anthropic for its Claude Cowork agent. These tools are designed to automate tasks across legal services, sales, marketing and data analysis. The announcement unsettled global markets by underscoring how AI automation could replace functions traditionally managed by large IT teams - a key revenue driver for India’s export-focused software services industry.
Analysts say the abrupt drop reflects mounting investor anxiety about how rapidly AI could erode demand for conventional services outsourcing. “These AI plug-ins are mainstreaming automation that was previously seen as niche,” one strategist told Reuters. “If companies can use tools like Claude to perform tasks that were billed hourly by human consultants, the business model for staffing-intensive IT firms faces real pressure.”
Major Indian IT exporters ended the session firmly in the red. Infosys, one of the country’s largest IT services companies, saw its shares fall sharply, while Tata Consultancy Services (TCS), Wipro and HCLTech also recorded notable losses. Smaller players were not spared either, with Persistent Systems witnessing a steep decline, adding to the broad weakness across tech stocks.
The negative sentiment was not confined to Indian markets. In the U.S. and Europe, data analytics and professional services firms also saw their shares slide after the announcement, as investors reassessed the earnings outlook for sectors vulnerable to AI-driven substitution. This global tech sell-off spilled into India, with brokerage firms flagging increased uncertainty around future revenue visibility and employment models for IT services companies.
Experts note that while AI adoption can drive productivity gains, its disruptive potential poses real challenges for a labour-intensive industry. India’s IT sector has long been built on a model of large teams providing scalable services to overseas clients. Advanced AI tools, which can automate coding support, data interpretation and even legal document analysis, could reduce the reliance on extensive human resources over time.
Some analysts also see potential longer-term benefits. AI could enable Indian firms to boost efficiency, offer new value-added services and compete in emerging tech markets if they adapt quickly. However, the immediate reaction highlights investor fear that the transition may be painful, with pressure on profit margins and possible workforce restructuring.
The decline in tech shares also came against a backdrop of other market forces, including a broader global tech sell-off and macroeconomic uncertainties. While energy and other sectors showed resilience, technology stocks emerged as the main drag on overall market performance.
The sell-off followed the launch of new AI plug-ins by U.S.-based startup Anthropic for its Claude Cowork agent. These tools are designed to automate tasks across legal services, sales, marketing and data analysis. The announcement unsettled global markets by underscoring how AI automation could replace functions traditionally managed by large IT teams - a key revenue driver for India’s export-focused software services industry.
Analysts say the abrupt drop reflects mounting investor anxiety about how rapidly AI could erode demand for conventional services outsourcing. “These AI plug-ins are mainstreaming automation that was previously seen as niche,” one strategist told Reuters. “If companies can use tools like Claude to perform tasks that were billed hourly by human consultants, the business model for staffing-intensive IT firms faces real pressure.”
Major Indian IT exporters ended the session firmly in the red. Infosys, one of the country’s largest IT services companies, saw its shares fall sharply, while Tata Consultancy Services (TCS), Wipro and HCLTech also recorded notable losses. Smaller players were not spared either, with Persistent Systems witnessing a steep decline, adding to the broad weakness across tech stocks.
The negative sentiment was not confined to Indian markets. In the U.S. and Europe, data analytics and professional services firms also saw their shares slide after the announcement, as investors reassessed the earnings outlook for sectors vulnerable to AI-driven substitution. This Shares of Indian IT stocks came under heavy pressure on February 4, 2026, as investor concerns deepened over the growing impact of advanced artificial intelligence on staffing-heavy service models. The NIFTY IT index, which tracks major technology companies listed on the National Stock Exchange, plunged 6.3 per cent - its sharpest single-day fall in over three years - reflecting mounting anxiety across the Indian IT sector.
The sell-off followed the launch of new AI plug-ins by U.S.-based startup Anthropic for its Claude Cowork agent. These tools are designed to automate tasks across legal services, sales, marketing and data analysis. The announcement unsettled global markets by underscoring how AI automation could replace functions traditionally managed by large IT teams - a key revenue driver for India’s export-focused software services industry.
Analysts say the abrupt drop reflects mounting investor anxiety about how rapidly AI could erode demand for conventional services outsourcing. “These AI plug-ins are mainstreaming automation that was previously seen as niche,” one strategist told Reuters. “If companies can use tools like Claude to perform tasks that were billed hourly by human consultants, the business model for staffing-intensive IT firms faces real pressure.”
Major Indian IT exporters ended the session firmly in the red. Infosys, one of the country’s largest IT services companies, saw its shares fall sharply, while Tata Consultancy Services (TCS), Wipro and HCLTech also recorded notable losses. Smaller players were not spared either, with Persistent Systems witnessing a steep decline, adding to the broad weakness across tech stocks.
The negative sentiment was not confined to Indian markets. In the U.S. and Europe, data analytics and professional services firms also saw their shares slide after the announcement, as investors reassessed the earnings outlook for sectors vulnerable to AI-driven substitution. This global tech sell-off spilled into India, with brokerage firms flagging increased uncertainty around future revenue visibility and employment models for IT services companies.
Experts note that while AI adoption can drive productivity gains, its disruptive potential poses real challenges for a labour-intensive industry. India’s IT sector has long been built on a model of large teams providing scalable services to overseas clients. Advanced AI tools, which can automate coding support, data interpretation and even legal document analysis, could reduce the reliance on extensive human resources over time.
Some analysts also see potential longer-term benefits. AI could enable Indian firms to boost efficiency, offer new value-added services and compete in emerging tech markets if they adapt quickly. However, the immediate reaction highlights investor fear that the transition may be painful, with pressure on profit margins and possible workforce restructuring.
The decline in tech shares also came against a backdrop of other market forces, including a broader global tech sell-off and macroeconomic uncertainties. While energy and other sectors showed resilience, technology stocks emerged as the main drag on overall market performance.
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