IT Stocks Mayhem! Infosys, TCS, Wipro shares slide on AI fears — Buy the dip or wait? Anil Singhvi explains

Concerns around artificial intelligence (AI) are weighing on Indian equity markets, particularly the information technology (IT) sector, market expert Anil Singhvi said on Thursday.

The Nifty IT index declined 4.45 per cent, trading at 33,534.75 amid broad-based selling in technology stocks. The fall was seen across large-cap and mid-cap counters.

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Coforge led the losses, falling 5.56 per cent to Rs 1,435.80. LTIMindtree dropped 4.90 per cent to Rs 5,245.50, while Tech Mahindra slipped 4.52 per cent to Rs 1,560.50.

Infosys fell 4.41 per cent to Rs 1,407.00, and Oracle Financial Services Software (OFSS) declined 4.39 per cent to Rs 6,900.50. Persistent Systems fell 4.37 per cent to Rs 5,474.0,0 and Wipro lost 4.34 per cent to Rs 219.83.

Tata Consultancy Services (TCS) declined 4.21 per cent to Rs 2,787.40, Mphasis dropped 4.05 per cent to Rs 2,483.40, and HCLTech fell 3.88 per cent to Rs 1,491.40.

Market Mood Remains Sluggish Despite Triggers

Singhvi said the current market mood remains sluggish even after several key triggers have played out. “Usually, after triggers play out, markets move higher. This time, despite triggers, the market has turned cold,” he said.

The Nifty recently touched the 26,000 mark, while Bank Nifty is hovering near life highs. However, Singhvi said the broader sentiment remains cautious and stock-specific.

He said AI has emerged as a major overhang for Indian IT companies. “I had said at the start of the year that IT stocks may not perform well because challenges are high. Now AI is becoming a big development,” he said.

IT Stocks Underperform Broader Market Across Timeframes

The recent underperformance of IT stocks has been sharp compared with the broader market. Last week, the Nifty IT index fell 7 per cent, even as the Nifty rose 2.5 per cent during the same period.

Across timeframes, the divergence has widened. In the past week, Nifty IT fell 7.18 per cent, while Nifty 50 rose 0.83 per cent. Over one month, Nifty IT declined 11.69 per cent compared with a 0.25 per cent gain in Nifty 50. In the three months, Nifty IT dropped 8.98 per cent, whereas Nifty 50 was marginally down 0.08 per cent.

In six months, Nifty IT slipped 3.25 per cent, while Nifty 50 gained 5.59 per cent. On a year-to-date basis, Nifty IT is down 12.12 per cent against a 1.11 per cent decline in Nifty 50. Over one year, Nifty IT has fallen 19.62 per cent, while Nifty 50 has risen 12.20 per cent.

Over longer periods, the gap narrows but remains visible. In three years, Nifty IT is up 8.67 per cent compared with a 44.80 per cent rise in Nifty 50. In five years, Nifty IT has gained 28.56 per cent, while Nifty 50 has advanced 70.52 per cent.

AI Disruption Fears Trigger Global Reaction

According to Singhvi, global AI developments are triggering sharp reactions in Indian IT stocks. Referring to a recent announcement by global AI firm Anthropic, he said markets reacted negatively after it indicated that it is developing coding systems that may reduce the need for software developers.

“When they said they are developing coding systems that may reduce the need for software developers, markets feared IT company revenues could fall significantly,” Singhvi said.

He added that Infosys and Wipro ADRs fell 4–5 per cent in the US following AI-related concerns. “There was no other reason for such a fall. It is the fear of AI disruption,” he said.

Fear Spreads Beyond IT to Insurance and Wealth Platforms

Singhvi said the impact of AI is no longer seen as limited to IT services. He noted that developments in AI-based online insurance models have raised concerns for insurance intermediaries and digital platforms.

“The moment it was said that AI can handle online insurance directly, stocks like PB Fintech saw sharp reactions,” he said. Similarly, wealth management platforms also came under pressure amid fears that AI could disrupt the online wealth business.

“Earlier, the risk was seen only in IT companies. Now the fear is spreading to insurance brokers and wealth platforms. This is a larger disruption theme,” Singhvi said.

Buy the Dip or Wait? Singhvi Advises Caution

On whether investors should buy IT stocks after the recent correction, Singhvi advised caution. “Do not rush to buy just because stocks have fallen. There is no hurry,” he said.

He suggested a dividend yield-based approach for long-term investors. “Consider buying large IT companies only when the dividend yield reaches 5 to 6 per cent. At that level, they may become attractive,” Singhvi said.

He said investors should calculate dividend payouts and assess whether yields justify fresh entry. “Review at that stage. Till then, avoid haste,” he added.

Singhvi said that while concerns around US President Donald Trump’s policies had eased recently, AI has emerged as a new external risk factor for Indian markets.

“One concern goes away, another starts. Now, AI disruption is the new challenge,” he said. He maintained that investors should remain selective and avoid aggressive buying in the IT space until valuations become more attractive.