IT Sector Stocks Plummet Up to 6% Amid US-Iran Tensions and February's ₹5.7 Lakh Crore AI-Led Market Rout

IT Stocks Plummet 6% Amid US-Iran War and AI Disruption Concerns

Market Capitalization Loss: The Indian IT sector suffered a significant loss of ₹5.7 lakh crore in market capitalization in a month, with the Nifty IT index plummeting 2% to 29,889, nearing its 52-week low level of 29,875.

Index Heavyweights Take a Hit: Shares of IT giants Tata Consultancy Services (TCS), Infosys, HCL Technologies, and Wipro shed between 1.5-3%, with Persistent Systems emerging as the worst performer, down 6%. Coforge shares lost 4.8% to hit their one-year low.

AI-Driven Productivity/Displacement Risk: A report by Motilal Oswal Financial Services estimated that 12-15% of the IT sector's revenue faces direct exposure to AI-driven productivity/displacement risk, with incremental pressure from third-party software efficiencies and automation layers.

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February Selloff: The IT sector suffered a massive selloff in February, wiping off ₹5.69 lakh crore from its market capitalization, with TCS shares emerging as the biggest wealth eroders, losing ₹176,019 crore in market capitalization.

US-Iran War Impact: The ongoing US-Iran war has added to the sector's woes, with rising exposure to the Middle East and growing risk-off sentiment potentially lowering order visibility. Indian IT companies have expanded operations in West Asia in recent years, with TCS and Wipro contributing 2.3% and 11% of their revenue, respectively, from this region.