LIVE MARKET DESK – IT SECTOR UPDATE

• Event:
  Indian IT stocks fall amid global AI-driven tech sell-off.
• Capital Impact:
  Outflows from IT and growth stocks into domestic cyclicals.
• Sector Effect:
  IT under pressure; infrastructure, banks, and domestic sectors gaining traction.
• Key Numbers:
  Nifty IT index down over 6%; major stocks fall 5–8%.
• Market Sentiment:
  Cautious on export-driven tech stocks.
• Immediate Outlook:
  Continued volatility expected as global tech sentiment remains weak.

Indian IT stocks witnessed sharp declines as global technology markets corrected amid concerns over artificial intelligence–driven capital expenditure cycles. Investors have become more selective in the tech space, leading to a broad-based sell-off across export-oriented software companies.

The Nifty IT index fell more than 6% during the week, marking one of the steepest short-term corrections in recent months. Major IT companies recorded losses ranging between 5% and 8%, reflecting global sentiment rather than company-specific developments.

The sector is heavily owned by foreign institutional investors (FIIs), making it more sensitive to global risk-off trends and capital allocation shifts across international portfolios.

Source: Exchange data and institutional market reports.

• Outflows: Foreign institutional investors trimming exposure to export-driven IT stocks.
• Rotation: Capital shifting toward domestic cyclicals, infrastructure, and banking sectors.
• Selective Buying: Investors focusing on companies with strong earnings visibility and lower global dependence.
• Valuation Reset: Growth stock valuations under pressure amid global tech repricing.

Sector Beneficiaries

• Infrastructure and capital goods companies.
• Domestic banking and financial stocks.
• Consumption and domestic demand-driven sectors.

Sector Under Pressure

• Large-cap IT exporters.
• Growth-oriented tech stocks with premium valuations.
• Companies heavily dependent on global discretionary tech spending.

Equity markets reflected the shift in global sentiment, with IT stocks leading losses across major indices. The correction in the technology sector contrasted with relative strength in infrastructure, banking, and domestic cyclical stocks.

Institutional investors appear to be reallocating capital toward sectors with stronger domestic earnings visibility and lower exposure to global technology spending cycles.

• Global AI-driven tech sell-off triggered outflows from FII-heavy IT stocks.
• Capital rotating toward domestic sectors with stronger earnings visibility.
• IT valuations may remain under pressure until global tech sentiment stabilizes.

The near-term outlook for Indian IT stocks will depend largely on global technology sentiment, U.S. corporate tech spending, and the trajectory of artificial intelligence investments.

Institutional investors are expected to remain selective, favoring companies with strong order books, diversified client exposure, and resilient margins. Meanwhile, domestic cyclicals could continue attracting capital as investors rebalance portfolios toward sectors linked to local growth drivers.

Why are Indian IT stocks falling?
The decline is linked to a global AI-driven tech sell-off, which has reduced investor appetite for growth-oriented technology stocks.

How much did the Nifty IT index fall?
The Nifty IT index dropped more than 6% during the recent correction.

Which sectors are benefiting from the sell-off?
Infrastructure, banking, and domestic cyclical sectors are seeing capital inflows.

Are FIIs selling IT stocks?
Yes, the sector is heavily owned by foreign investors, making it more sensitive to global risk-off trends.

What is the outlook for Indian IT stocks?
The outlook depends on global tech sentiment, AI spending cycles, and earnings visibility across major IT companies.