India’s Nifty IT index tumbled 3.6% on Tuesday to its lowest level since May 2023, as a weak earnings outlook and fears of slowing demand for traditional IT services rattled investors.
Analysts at HSBC said in a Tuesday note that fourth-quarter earnings and fiscal 2027 outlooks from India’s top-tier IT firms largely missed expectations, adding that strong global artificial intelligence spending could be “crowding out” spending on traditional IT services.
HSBC’s warning comes a day after OpenAI said it is launching a new company backed by more than $4 billion to help organisations build and deploy AI.
In February, global IT stocks saw arout after Anthropic launched new tools that heightened concerns about AI-driven disruption in the data and professional services industry.
On Tuesday, shares of Indian IT companies including Tata Consultancy Services , Infosys , HCL Technologies and Wipro fell between 2.5% and 4%.