Infosys, TCS, LTIMindtree Drop Nearly 8%: What Triggered the Selloff

Shares of Indian information technology (IT) companies fell nearly 7% on Wednesday, with heavyweights such as Infosys, Tata Consultancy Services (TCS), HCLTech and Wipro witnessing sharp selling pressure. Analysts said the decline was triggered by the launch of a new artificial intelligence (AI) tool by Anthropic.

At 12 PM, shares of LTIMindtree had fallen 7.97%, followed by Infosys down 7.89%, Coforge slipping 7.73% and Persistent Systems declining 7.49%. Mphasis dropped 7.07%, while Tech Mahindra fell 6.68% and TCS slid 6.29%. HCLTech declined 5.76%, Wipro was down 4.52% and OFSS fell 3.98%. Reflecting the broad-based sell-off, the Nifty IT index plunged 6.84%.

Anthropic has enhanced its enterprise AI assistant with a new automation layer capable of managing end-to-end business workflows. The development has prompted investors to reassess whether conventional SaaS platforms will remain indispensable as AI systems gain the ability to execute complex tasks independently.

The updated platform adds a suite of automation features that go well beyond basic AI support. Instead of merely assisting employees within existing software, the AI can now independently run entire operational processes. These automations span areas such as legal document review, compliance monitoring, sales planning, marketing performance analysis, financial reconciliation, data visualisation, SQL-based reporting and organisation-wide document search.

In effect, tasks that previously required multiple standalone software tools can now be handled within a single AI-powered system. This has intensified concerns that companies may increasingly prefer integrated AI workflow solutions over traditional SaaS subscriptions.

Following the launch, shares of major AI-linked companies also came under pressure. Nvidia and Microsoft fell nearly 3% each, while Alphabet slipped 1.2% ahead of its earnings announcement on Wednesday. Amazon shares declined 1.8% ahead of its results due on Thursday, while Salesforce and Adobe dropped around 7% each. The broader tech sell-off dragged the Nasdaq down 1.43% to 23,255.19 points, while the Dow Jones Industrial Average slipped 0.34% to 49,240.99 points.

Earlier, Dr VK Vijayakumar, chief investment strategist at Geojit Investments Limited, said, “The rally fuelled by the US–India trade deal will face hurdles in sustaining itself. The IT sell-off in the US yesterday will drag the Indian IT index too, constraining the rally in the domestic market. Since valuations continue to be high, there is no fundamental support for a sustained rally.”

“Yesterday’s 639-point rally was mainly driven by FII short covering and their cash market buying of ₹5,236 crore. Given current valuations, this bullish trend is likely to run out of steam. Investors should stick to fairly valued large-cap stocks. Sectors expected to benefit from exports to the US, such as textiles and apparel, gems and jewellery, and marine processing, could see further price action,” he added.