Synopsis: The Nifty IT index extended its brutal February sell-off on Tuesday, February 24, 2026, plunging 4.75% to hit a fresh 10-month low of 30,048.05. Driven by intensifying fears over AI-led disruption and a sharp correction in US tech stocks, the Indian IT sector has now seen over ₹5.05 lakh crore in market value eroded this month alone.
Nifty IT Crash 2026
The Indian technology sector witnessed intense selling pressure on Tuesday, deepening concerns around the Nifty IT Crash 2026.
The Nifty IT index extended its losing streak to five consecutive sessions, signaling growing investor anxiety and sustained weakness in frontline IT stocks.
The index opened weak and continued to slide, ultimately underperforming the broader Nifty 50. This month-to-date decline has now widened to a staggering 20%, signaling a massive “risk-off” sentiment among global and domestic investors toward Indian software services.
The Anthropic “Claude Code” Catalyst
The primary trigger for today’s vertical drop was a ripple effect from Wall Street. Sentiment soured after the AI firm Anthropic announced “Claude Code,” a tool designed to modernize legacy COBOL systems—a high-margin revenue stream for Indian giants like TCS and Infosys.
- Global Transmission: IBM’s 13% crash in the US overnight provided a grim preview, as investors feared that autonomous AI tools would disintermediate the traditional man-hour-driven business models of Indian IT.
- Valuation Re-rating: Major brokerages, including Jefferies and CLSA, have downgraded several Indian IT stocks, citing structural risks where AI automation could lead to a 14%–16% gross deflationary impact on sector revenues.
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Constituent Performance: All 10 Stocks in the Red
The bloodbath was broad-based, leaving no large-cap or mid-cap player spared. Every single constituent of the Nifty IT index traded in negative territory:
- HCL Technologies & Persistent Systems: Led the losers, dropping over 4% each.
- Infosys & TCS: Declined 3.7% and 3.5%, respectively, as FIIs continued their heavy exit from the sector.
- Wipro & Tech Mahindra: Slipped between 2.9% and 3.8% as the sector’s combined market cap fell to its lowest point since April 2025.
Macro Pressures: Fed and Tariffs
Beyond AI, macroeconomic factors are weighing heavily. Stronger-than-expected US jobs data has reduced the probability of near-term Fed rate cuts, keeping treasury yields high and pressuring “long-duration” tech valuations.
Additionally, the impending 10% US import surcharge effective February 24 has added a layer of uncertainty regarding discretionary tech spending by American clients.
While the Nifty IT index is now trading near its 10-year average P/E of 21.6x, analysts suggest that bottom-fishing may be premature.
Investors are currently prioritizing safety in sectors like banking and capital goods until the IT industry demonstrates a clear execution roadmap for integrating AI into its core offerings.
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