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By Bharath Rajeswaran
Feb 25 (Reuters) – Indian shares have lagged their Asian and rising market friends up to now in February, pressured by a $68.6 billion rout out there worth of knowledge expertise shares, as buyers fretted over disruptions linked to synthetic intelligence.
The Nifty 50 index has risen 0.4% up to now this month, whereas the Sensex edged 0.1% decrease, underperforming each the MSCI Asia ex-Japan and MSCI Rising Markets indexes.
The stress on the benchmark indexes has largely come from IT shares, which carry roughly an 11% weightage within the blue-chip index, the second-highest sectoral weight.
The ten Nifty IT constituents have misplaced a mixed $68.6 billion in market capitalisation in February, as of the final shut, with the index down 21% and on target for its worst month-to-month efficiency in practically 23 years.
All 10 index members have fallen between 16.8% and 27% in February to this point. Coforge is the steepest share decliner, down 26.8%, whereas Tata Consultancy Providers and Infosys have led the worth erosion, dropping about $21.9 billion and $16.3 billion in market worth, respectively.
The selloff displays rising issues that quickly advancing automation instruments may compress challenge timelines and disrupt the labour-intensive supply mannequin underpinning India’s roughly $300-billion IT companies business.
Traders have zeroed in on the AI-driven automation push from U.S. companies equivalent to Anthropic and Palantir, heightening issues over quicker challenge execution, pricing stress and diminished billable hours.
Brokerages warn the Indian IT sector may face additional stress if AI begins to eat into utility companies income, which usually accounts for 40% to 70% of complete income for these firms.
“There are not any simple solutions as to if AI finally renders IT companies out of date over the long run,” mentioned analysts led by Abhishek Pathak of Motilal Oswal.
“The narrative that AI is coming for not simply IT however massive swathes of the economic system might be too sturdy to shake, not less than within the brief time period,” Motilal Oswal analysts mentioned.
A slowdown or contraction in India’s IT sector, whether or not by way of layoffs or diminished hiring, can have speedy penalties on each residential and industrial actual property demand. The Nifty Realty index has risen roughly 2% in February, following a virtually 18% decline over the previous three months.
Considerations over Indian IT firms have additionally accelerated international promoting within the sector in 2026 up to now.
Whereas FPIs have turned consumers of Indian shares in February on an total foundation, with inflows of 196.75 billion rupees, they pulled out about 110 billion rupees ($1.21 billion) from IT shares within the first half of February, following a report 750 billion rupees of internet promoting in 2025.
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