IT Selloff remain under pressure despite gains in broader markets
Indian IT shares extended losses for the fourth straight session on Thursday as concerns around artificial intelligence and slowing global demand continued to weigh on sentiment.
Interestingly, the broader market moved in the opposite direction.
Benchmark indices Sensex and Nifty traded higher, supported by value buying, easing volatility and positive sentiment surrounding ongoing US-China talks.
Technology stocks, however, failed to join the rally.
The Nifty IT index slipped nearly 3% during the session and has now fallen almost 8% over the last four trading days.
Read More : Rupee falls 95.93 for a second straight day as pressure continues to build
Nifty IT Declines (2025–May 2026)
| Period | Decline | Status |
|---|---|---|
| Full Year 2025 | 12.6% fall | Supported by broader sector performance data |
| Jan–Mid March 2026 | 28% correction from peak | Worst Jan–March decline since 2008 |
| Year-to-date 2026 (by May) | More than 25% decline | Nifty IT shed over one-fourth of its value |
| 12 May 2026 (single day) | 3.7% fall | Lowest level since May 2023 |
| Last 4 trading sessions (May 2026) | 8% decline | AI concerns and OpenAI news accelerated selling |
| From Dec 2024 peak to May 2026 | 39–40% correction | Multiple reports confirm nearly 40% fall |
IT & AI Stocks (May 2026)
| Stock | Category | Approx. Share Price | Daily Change |
|---|---|---|---|
| TCS | IT + AI | ₹2,220–2,273 | ▼ 1.2% to ▼2.3% |
| Infosys | IT + AI | ₹1,090–1,123 | ▼ 1.5% to ▼3.1% |
| HCLTech | IT + AI | ₹1,143–1,200 | ▼0.2% to ▼2.0% |
| Persistent Systems | AI-focused IT | ₹4,845 | ▼0.7% to ▼5% |
| Coforge | AI-focused IT | ₹1,297 | ▼1.8% to ▼3.2% |
| Tech Mahindra | IT + AI | ₹1,360–1,500 | ▼2.8% to ▼5% |
| Tata Elxsi | AI & Engineering | — | AI-focused business |
| Happiest Minds | Digital + AI | — | AI-focused business |
| Affle India | AI advertising | — | AI-driven platform |
OpenAI’s latest move appears to have triggered fresh concerns
The latest pressure on IT stocks came after OpenAI announced a new enterprise-focused initiative backed by more than $4 billion.
The new deployment company aims to help organizations build and integrate AI solutions directly into their business operations.
According to OpenAI, specialized engineers will work with business leaders and teams to identify areas where AI can create the biggest impact.
That announcement quickly caught investor attention.
Many traders now believe AI may begin reshaping traditional IT service models faster than expected.
A market participant said, “The market is trying to understand whether AI becomes a growth opportunity or creates disruption for existing players.”
Jobs Fall in the IT Sector: 2025 to May 2026
Here’s a verified and cleaner snapshot of job declines in the IT sector from 2025 to May 2026, especially for Indian IT and broader tech trends:
| Period | Jobs Impact | Details |
|---|---|---|
| FY2025 | +12,718 jobs added | India’s top five IT firms still saw modest hiring growth. |
| FY2026 (till Apr–May) | 6,981 jobs cut | TCS, Infosys, Wipro, HCLTech and Tech Mahindra together reported a net workforce reduction. |
| TCS (FY2026) | 23,460 jobs reduced | Largest workforce decline among major Indian IT companies. |
| Tech Mahindra (FY2026) | 1,108 jobs reduced | Continued workforce rationalisation. |
| Global Tech Layoffs – 2025 | 245,953+ jobs cut | Layoffs across major global technology companies. |
| Global Tech Layoffs – 2026 (till May) | 135,724+ jobs cut | Layoffs accelerated again amid AI restructuring. |
Why jobs declined
• Companies shifted from mass hiring to efficiency-focused hiring
• AI adoption reduced demand for routine work and increased demand for specialized skills
• Weak client spending and slower deal decisions hurt hiring plans
• Hiring shifted toward AI, cloud, cybersecurity and domain specialists
Here’s what happened today and why traders reacted
Several developments drove the sharp reaction in IT stocks:
- Nifty IT index fell nearly 3%
- IT shares declined for a fourth straight session
- The index has dropped around 8% in four days
- Every Nifty IT stock traded in the red
- OpenAI’s AI deployment push created uncertainty
- Weak global conditions hurt sentiment
Traders reacted because selling pressure remained concentrated in one sector despite gains elsewhere.
That often signals deeper concerns among investors.
Persistent Systems and HCLTech lead the decline
Selling pressure was visible across the sector.
Persistent Systems emerged as the top laggard and dropped more than 5%.
HCL Technologies and Tech Mahindra also declined up to 5%.
Meanwhile, Wipro, Tata Consultancy Services, Infosys and Coforge fell between 1% and 3%.
The broad decline indicated sector-wide weakness rather than company-specific pressure.
Weak global demand is adding to investor worries
AI concerns were not the only reason behind the selloff.
Analysts also pointed toward weak global economic conditions and cautious enterprise spending trends.
Businesses across major economies are becoming more selective with technology budgets amid uncertainty.
That creates pressure for Indian IT firms because a large share of revenue depends on overseas markets.
India’s $315 billion IT sector earns nearly 57% of its revenue from the US market.
Any slowdown there can quickly affect earnings expectations.
Market experts believe AI may reshape—not replace—the sector
Despite the sharp correction, some analysts remain optimistic about the long-term outlook.
Prashasta Seth believes Indian IT companies have successfully handled major technological changes in the past.
“Indian IT companies have historically adapted well to cloud, automation and digital transformation cycles,” Seth said.
He added that AI could change delivery models instead of replacing established companies.
“AI will not eliminate Indian IT but is more likely to restructure it and push companies toward higher-value AI integration work,” he added.
What impacted investors and what could happen next
For traders, the latest decline could mean continued volatility in IT stocks over the near term.
Investors with heavy exposure to technology shares may experience pressure on portfolio returns if uncertainty continues.
However, analysts believe stock selection may become more important than broad sector bets.
Companies adapting faster to AI changes could emerge as stronger winners in the next phase of growth.
For investors, this correction may not just be another selloff. It may be the market’s first reaction to a larger shift taking shape across the technology industry.
