Indian IT Stocks Experience Sharp Decline, Plummeting Over 5%
IT stocks snap three-day rally, plunge over 5% in sharpest fall in nearly four months
Image: The Economic Times
Indian IT stocks faced a significant downturn on Wednesday, dropping over 5% after a three-day rally. The Nifty IT index fell 5.6%, driven by concerns about AI's impact on traditional revenue streams, leading to a sell-off among investors.
- 01The Nifty IT index experienced a decline of 5.6%, marking the steepest drop in nearly four months.
- 02Major IT companies such as Tata Consultancy Services and Persistent Systems saw significant losses of 8.3% and 7.1%, respectively.
- 03The recent rally was described as a 'dead-cat bounce', indicating a temporary recovery amidst ongoing revenue concerns in the IT sector.
- 04Year-to-date, the Nifty IT index has fallen by 22.4%, compared to a 10.4% drop in the benchmark Nifty.
- 05Analysts anticipate a choppy market ahead, with upcoming earnings season expected to influence stock performance.
Advertisement
In-Article Ad
On Wednesday, Indian IT stocks ended their three-day winning streak with a significant drop of over 5%, the largest single-day decline in nearly four months. The Nifty IT index fell by 5.6%, reflecting worries about AI's potential to disrupt traditional revenue streams in the $280-billion legacy services sector. Major players, including Tata Consultancy Services and Persistent Systems, saw their shares decline by 8.3% and 7.1%, respectively. This downturn was characterized as a 'dead-cat bounce', suggesting that the earlier gains were temporary amidst ongoing uncertainty. Despite the sharp decline, analysts believe that while the downside may be limited, a substantial recovery is not expected in the near term. The Nifty IT index has dropped 22.4% year-to-date, compared to a 10.4% decline in the benchmark Nifty. Investors are now looking ahead to the upcoming earnings season for further cues, as the market remains cautious.
Advertisement
In-Article Ad
The sharp decline in IT stocks could affect investor confidence and market sentiment, potentially leading to further volatility in the sector.
Advertisement
In-Article Ad
Reader Poll
What do you think about the future of Indian IT stocks?
Connecting to poll...
More about Tata Consultancy Services
&w=1200&q=75)
Andhra Pradesh Teacher Recruitment Controversy: Allegations of Corruption and Defense from Government
Zee News • Jun 4, 2026
TCS Shares Plunge Over 9%, Facing Worst Decline Since COVID-19 Market Crash
The Economic Times • Jun 3, 2026
Microsoft 365 Copilot Adoption Surges Among Major Indian IT Firms
Business News India • Jun 3, 2026
Read the original article
Visit the source for the complete story.