Worst week in 4 months: Claude casts a long shadow over Indian IT stocks

Shares of Indian information technology (IT) companies slid on Friday, capping their worst weekly performance in four months, as concerns resurfaced that rapid advances in artificial intelligence (AI) could disrupt traditional technology services businesses. The Nifty IT index fell 1.5 per cent on Friday and declined 6.4 per cent over the week.

The selloff erased about ₹1.51 trillion in market capitalisation from IT stocks.

All constituents of the index ended lower on Friday. Over the week, Infosys dropped 8.2 per cent -- the steepest fall among index peers -- followed by Tech Mahindra, which slid 7.1 per cent.

The renewed anxiety follows recent announcements by Anthropic, which on Thursday released an upgraded version of its AI model aimed at financial research. The company said the new Claude Opus 4.6 model can deliver detailed financial analyses in hours that would otherwise take days, and has enhanced capabilities across finance-related tasks and software development.

The rout also comes days after Anthropic introduced new plug-ins that enable its generative AI workspace to automate workflows across legal, sales, marketing and data analysis functions.

Earlier this week, the Nifty IT index had tumbled 5.9 per cent on Wednesday, its sharpest single-day fall since March 23, 2020.

Concerns over AI-led disruption are weighing on the sector at a time when revenue growth for Indian IT firms remains subdued.

“The IT industry is growing in poor single digits in dollar terms. On top of that, fears of AI eating into existing business models have shaken investor confidence,” said G Chokkalingam, founder of Equinomics. “If the sector were posting double-digit growth, the correction would not have been this severe. Now there is even talk of de-growth.”

Chokkalingam, however, described the current selloff as an overreaction and said IT stocks could rebound in the coming months. “Indian IT companies are integrating AI tools to improve productivity and reduce costs, and some large players have already won AI-related projects. That said, the wealth-creation phase for IT is over. At best, the sector now serves as a hedge against steady rupee depreciation,” he said.

The best week in three months for Nifty, Sensex

Benchmark indices ended their best week in around three months as a long-awaited US trade deal announcement lifted a major overhang, outweighing the Budget-day selloff and a slump in global software stocks. On Friday, the Nifty 50 rose 0.2 per cent to 25,693.70, while the Sensex gained 0.32 per cent to 83,580.40. Both indices climbed about 1.5 per cent over the extended trading week -- their best performance since the week ended November 16, 2025. The Nifty 50 also recorded its widest trading range since early June 2024.