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14-02-2026
Bureau Report
NEW DELHI: Indian shares fell on Thursday, with information technology shares hovering near a 10-month low, on concerns over artificial intelligence disruption while fading expectations of a near-term US rate cut also weighed.
Rapid advances in AI, triggered in part by Anthropic’ s latest automation push, have fueled fears of AI-driven automation disrupting Indian IT’s labor-intensive business model.
The IT index, opens new tab fell 5.5% on the day, the biggest decline in percentage terms among 16 sub-indexes. It has declined 12.5% so far in 2026 after losing 12.6% last year.
“There is no denying the fact that AI could effectively address the problems that Indian IT was solving collectively,” said Tarun Singh, founder and managing director of Highbrow Securities, adding that AI shocks will have to be absorbed as Indian IT is a big outsourcing market.
Stronger-than-expected January US jobs data, which dented near-term rate cut expectations, also weighed.
The tech-heavy Nasdaq Composite, opens new tab fell 0.2% overnight, with a sharp drop in software stocks from AI-led disruption, while hardware and chip stocks such as Samsung Electronics, opens new tab and SK Hynix, opens new tab pushed Asian shares to record highs.
On the day, the Nifty 50, opens new tab fell 0.57% to 25,807.2 and the BSE Sensex, opens new tab shed 0.66% to 83,674.92. Twelve of the 16 sectors logged losses.
The broader small-caps, opens new tab and mid-caps, opens new tab lost 0.6% and 0.5%, respectively.
The declines come even as sentiment broadly improved earlier this week, after India and the US unveiled an interim framework, while India and the European Union finalized a landmark trade deal in January.
The Nifty had gained 1.2% in the last four sessions.
While the two deals lent a semblance of stability to markets, there is very little room for disappointment when it comes to earnings, said Singh.
Profit growth of India’s Nifty 50 companies is expected to remain in single digits in the December quarter, with several companies across sectors having taken a one-time hit due to the government’s revamped labor codes.
Consumer goods major Hindustan Unilever, opens new tab slid 2.2% on the day on a profit drop.
Rapid advances in artificial intelligence, triggered in part by Anthropic’ s latest automation push, could structurally erode the IT sector’s high-margin application services revenues, creating downside risks to earnings and valuations, analysts warn.
The weakness has echoed across global IT stocks this week, extending a broader selloff in companies seen as most exposed to potential AI disruption.
“There is more pain ahead for Indian IT,” Jefferies said, adding that Anthropic’ s and Planter’s claims highlight how AI could potentially erode application service revenues for IT firms.
“With application services accounting for 40–70% of revenues, firms face growth pressures, and consensus growth estimates do not fully reflect this, posing downside risks to valuations.”
Indian IT firms have been ramping up AI investments and re-skilling efforts, even as weak global tech spending, delayed client decision-making and pricing pressure have weighed on the sector. Foreign investors offloaded a record $8.5 billion worth of Indian IT stocks in 2025.
